Finra fines, suspends ex-Merrill Lynch broker over loans from clients
Fred Brown also failed to change his employment record to disclose two tax liens and three civil judgments.
The Financial Industry Regulatory Authority Inc. on Tuesday fined a former Merrill Lynch broker $12,500 and suspended him for eight months after the broker borrowed $69,000 from two of his clients without telling his firm. The broker, Fred Brown, also did not change his employment record to disclose two tax liens and three civil judgments, a violation of industry rules.
Mr. Brown started in the brokerage industry in 1985, worked at Merrill Lynch briefly and then worked at a handful of other firms before returning to Merrill in 2012, according to his BrokerCheck profile. Merrill fired him in 2017 after allegations surfaced that he accepted money from a client without the firm’s approval, according to BrokerCheck.
According to the Finra settlement, Mr. Brown neither admitted to nor denied any of Finra’s findings. Formerly based in Merrill’s Montgomery, Ala. office, Mr. Brown could not be reached to comment.
Finra rules state that brokers may not borrow money from customers unless the broker-dealer allows for it and the borrowing arrangements meet certain criteria.
Earlier this month, Finra barred another former Merrill Lynch broker whom the firm fired in 2018 after he faced allegations of accepting loans from a client.
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