Merrill Lynch Fined for Unregistered Principal
From the Desk of Jim Eccleston at Eccleston Law LLC:
Merrill Lynch agreed to a censure and a $150,000 fine to settle alleged violations with FINRA Enforcement. According to FINRA Enforcement, Merrill Lynch allowed an executive to function as a principal in its prime brokerage business, despite the fact that the executive was not registered with FINRA.
According to a Letter of Acceptance, Waiver and Consent (“AWC”) signed by Merrill Lynch on April 29, 2020, an executive with the firm’s non-FINRA member affiliate was actively engaged in the management of the firm’s prime brokerage business in the United States and exercised managerial decision-making authority. According to FINRA, these management activities included hiring prime brokerage employees, direct supervision of some employees and soliciting business from current and prospective clients. These alleged violations took place between April 2016 and April 2020
FINRA found that this conduct violated NASD Rule 1021 (for conduct prior to October 1, 2018), FINRA Rule 1220 (for conduct on or after October 1, 2018), and FINRA Rule 2010. By signing the AWC, Merrill Lynch accepted and consented to the entry of FINRA’s findings, without admitting or denying those findings.
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Related Attorneys: James J. Eccleston
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