Merrill Lynch ordered to pay $15 million to settle mortgage securities charges

SEC says firm employees misled customers into overpaying for RMBS debt.
JUN 12, 2018

The Securities and Exchange Commission has ordered Merrill Lynch to pay more than $15 million to settle charges that its employees misled customers into overpaying for residential mortgage-backed securities (RMBS). The SEC said that the firm agreed to repay more than $10.5 million to its customers and to pay penalties of approximately $5.2 million, according to a release from the agency. In its order, the SEC found that Merrill Lynch traders and salespersons persuaded customers to overpay for the securities by deceiving them about the price Merrill Lynch paid to acquire the securities. The order also found that the firm's RMBS traders and salespersons illegally profited from excessive, undisclosed commissions – called "mark-ups" – which in some cases were more than twice the amount the customers should have paid. According to the SEC's order, Merrill Lynch failed to have reasonably designed compliance and surveillance procedures in place to prevent and detect the misconduct. Without admitting or denying the findings, Merrill Lynch agreed to be censured and to pay the penalties, disgorgement and interest the SEC imposed.

Latest News

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave