FINRA Fines and Suspends Merrill Lynch Advisor Over Unauthorized Role as Estate Executor
From the desk of Jim Eccleston at Eccleston Law
Frederick R. Watson, a veteran advisor with 37 years of experience at Merrill Lynch, has been fined $10,000 and suspended for four months by the Financial Industry Regulatory Authority (FINRA). The penalty stems from allegations that Watson served as the executor of a client's estate without obtaining permission from Merrill Lynch.
According to AdvisorHub, Watson began acting as the executor in 2018 following the death of a longtime client. However, he allegedly falsely claimed on internal compliance questionnaires that he was not engaged in such a role. This violation of FINRA's outside business activity rule occurred without prior authorization from Merrill Lynch, preventing advisors from taking on roles with a "reasonable expectation of compensation" without firm approval. Although Watson sought compensation for his executor duties, he reportedly did not receive payment.
Merrill Lynch became aware of the situation in September 2019 when an estate beneficiary filed a lawsuit against Watson. In response, Merrill issued a written warning and reported the incident to FINRA, leading to the regulatory investigation that resulted in Watson's fine and suspension.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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