Due Diligence

Merrill Fined For Overcharging Clients $32 Million

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Whoops. Merrill Lynch charged clients a lot of fees it wasn’t supposed to—$32 million, to be exact—and failed to provide certain required trade notices, according to FINRA charges released Thursday. Merrill has already paid that money back to clients, plus interest. But FINRA fined the brokerage firm $2.8 million for the missteps anyway.

FINRA found that over an eight year period—from April 2003 to December 2011—Merrill’s supervisory system failed to ensure that customers in certain investment advisory programs were billed according to contract and disclosure documents. Around 95,000 customer accounts were affected. Due to computer programming errors, the firm also failed to provide timely confirmations on some 10.6 million trades in 230,000 advisory accounts between July 2006 and November 2010.

Bank of America says the glitches were caused by operational issues after it acquired Merrill Lynch, including improper coding of accounts. But it has improved its systems to address these issues.
 

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