Finra bars rep fired by Merrill Lynch over improper fund sales

Finra bars rep fired by Merrill Lynch over improper fund sales
Bhenoy Dembla entered fictitious trades to circumvent Class B sales limits.
FEB 06, 2019

The Financial Industry Regulatory Authority Inc. has barred Bhenoy Dembla, who was discharged by Merrill Lynch in 2016, for falsifying documents in connection with sales of mutual funds. Mr. Dembla, who worked in Chicago and joined Merrill Lynch in 2001, entered fictitious sell orders to circumvent protections of the firm's electronic order system, which prevents the entry of a purchase order for Class B shares if it would cause the client to accumulate shares above the accumulation limit. (More:In latest A-share discount snafu, broker-dealer pays $1.37 million to clients) After entering the sell order, Mr. Dembla would then enter a purchase order, which would be accepted; afterward, he would cancel the fictitious sell order. As a result, the customer would exceed the thresholds for Class B shares, Finra said. From December 2015 through April 2016, Mr. Dembla placed and then later cancelled 41 fictitious sell orders to execute 29 purchases of Class B shares, which caused the accounts of 18 customers to exceed the accumulation limit by a total of $863,000. He also provided false entries on each order regarding why the customer purportedly wanted to sell the fund, according to a Finra letter of acceptance, waiver and consent. Merrill Lynch subsequently provided $31,801 in restitution to these customers, the letter said.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.