Ex-Merrill broker Thomas J. Buck pleads guilty to securities fraud, will pay SEC $5M ​

The ex-broker was accused of collecting $2.5 million in excessive commissions and fees from at least 50 clients

Oct 31, 2017 @ 4:36 pm

By Mark Schoeff Jr.

Thomas J. Buck, a former high-producing rep for Merrill Lynch who was fired and then kicked out of the securities industry, pleaded guilty Tuesday to overcharging clients by millions of dollars. He also reached a settlement with the SEC for more than $5 million.

In its complaint, the SEC said that from 2012 through March 2015, Mr. Buck, 63, received more than $2.5 million in excessive commissions and fees from at least 50 clients with whom he was working in his Carmel, Ind., practice. He headed what was known as the "Buck Team" with more than 3,000 accounts and $1.3 billion in assets under management.

The SEC said that Mr. Buck put clients into accounts where they paid commissions rather than less expensive fee-based alternatives. He did not tell clients that his commissions exceeded promised limits and placed unauthorized trades in their accounts.

At the time, Merrill told its registered representatives and advisers to compare annual commissions to annual fees and put their clients in the less costly accounts. Typical Indiana-based Merrill advisers received 70% of their revenue from clients in fee-based accounts, while 80% of Mr. Buck's clients were in commission accounts.

Mr. Buck agreed to pay $2.6 million in disgorgement, a $2.2 million penalty and interest of $297,000. He was fired by Merrill Lynch in March 2015 and later that year barred from the brokerage industry by the Financial Industry Regulatory Authority Inc. He now lives in Orchid, Fla.

He also was the subject of an FBI probe, which resulted in one count of securities fraud to which Mr. Buck pleaded guilty. He faces up to 25 years in prison.

"These are not victimless crimes," W. Jay Abbott, special agent in charge of the FBI's Indianapolis Division, said in a statement. "That's why the partnerships the FBI has with agencies such as the Securities and Exchange Commission are important to ensuring a stop is put to unauthorized and illegal activities."

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

Big trends in RIA acquisition

Consolidation is continuing. Acquisitions and mergers are on the rise. Is there an AUM threshold that advisers need to reach for a practice to be viable? Captrust's Rush Benton offers some perspective.

Latest news & opinion

Nontraded BDC sales in worst year since 2010

The illiquid product's three-year decline is partially due to new regulations and poor performance.

Tax reform debate sparks fresh interest in donor-advised funds

Schwab reports new accounts up 50% from last year, assets up 33%.

Nontraded REITs to post worst sales since 2002

The industry is on track to raise just $4.4 billion, well off the $19.6 billion it raised just four years ago, as new regulations hinder sales.

Broker protocol for recruiting a boon for clients

New research finds advisers whose firms have joined the agreement take better care of customers.

Meet our 2017 Women to Watch

Introducing 20 female financial advisers and industry executives who are distinguished leaders, advancing the business of providing advice through their creativity and hard work.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print