Merrill Lynch settles ski resort claims for $4.5 million

Merrill Lynch settles ski resort claims for $4.5 million
The settlement stemmed from potential claims related to Merrill's "management and oversight" of brokerage accounts opened by the owner of Jay Peak, the failed Vermont ski resort.
JAN 07, 2022

Merrill Lynch is the latest investment firm to reach a settlement with regulators over the messy Jay Peak ski resort visa fraud scheme, agreeing to a settlement in two parts Thursday: one for $4 million with the Jay Peak receiver and the other for $500,000 in lieu of a penalty with the Vermont Department of Financial Regulation, which will be provided directly to the receiver for investor restitution.

Merrill's settlement with the receiver appointed by the Securities and Exchange Commission stemmed from potential claims related to the "management and oversight" of brokerage accounts opened by Jay Peak's owner, Ariel Quiros, at Merrill, according to a court filing Thursday. Beginning in 2014, Quiros had more than a dozen brokerage accounts at Merrill Lynch, according to the receiver.

Raymond James and Citibank had previously reached settlements in the matter.

The Vermont regulator alleged that Merrill Lynch’s administration of the accounts represented potential violations of the Vermont Securities Act, according to a statement Friday from the Department of Financial Regulation.  

The investigation "revealed that the receiver’s potential claims against Merrill involve disputed facts that would require substantial time and expense to litigate, with significant uncertainty as to the outcome of such litigation and any ensuing appeal," according to the court filing. The U.S District Court for the Southern District of Florida will need to approve the settlement.

In 2016, the SEC filed a complaint claiming fraud against Quiros and Jay Peak president William Stenger, alleging that they and their companies made false statements and omitted key information while raising more than $350 million from investors to construct ski resort facilities and a biomedical research facility in Vermont.

The complaint alleged that Quiros and Stenger "controlled and utilized" their various businesses to defraud foreign investors who invested in certain limited partnerships under the federally created EB-5 visa program. That program helps foreigners obtain permanent residency by investing in job-creating developments in the U.S.

A Merrill Lynch spokesperson said the firm had no comment on the matter beyond the court filing.

In 2017, Raymond James Financial Inc. reached a $150 million settlement in the financing of the failed Jay Peak ski resort and related real estate development.

Latest News

UBS client says his wife moved in with their wealth advisor. It got messy
UBS client says his wife moved in with their wealth advisor. It got messy

Advisor accused of scheming to move family trust to firm, lawsuit seeks $10 million in damages.

Gen Zs are grappling with financial challenges in extraordinary times
Gen Zs are grappling with financial challenges in extraordinary times

Young Americans are inexperienced in navigating current stormy waters.

Musk needs to exit role at 'neglected' Tesla, says $3.3B investment firm CEO
Musk needs to exit role at 'neglected' Tesla, says $3.3B investment firm CEO

Early investor in EV firm says it is in crisis and needs a change of leadership.

Nvidia unveils superchips, addresses spiraling cost concerns
Nvidia unveils superchips, addresses spiraling cost concerns

Chipmaker's developer conference comes at a pivotal moment.

Citi slashes 'transformation' bonuses for senior execs
Citi slashes 'transformation' bonuses for senior execs

Three-year program aimed to boost regulatory compliance, culture change.

SPONSORED Beyond the all-in-one: Why specialization is key in wealth tech

In an industry of broad solutions, firms like intelliflo prove 'you just need tools that play well together'

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies