Merrill Lynch to Pay $26 Million to New Hampshire Regulator to Settle Charges of Excessive Trading

From the Desk of Jim Eccleston at Eccleston Law LLC:

Merrill Lynch has agreed to pay a $2 million fine and $24.3 million in reimbursement to clients to settle an action brought by the New Hampshire Bureau of Securities Regulation. The enforcement action stemmed from excessive trades made by Charles Kenahan, a former Merrill Lynch broker. Kenahan was terminated from Merrill Lynch in July 2019 for allegedly making excessive trades, as well as making unauthorized trades and unsuitable investment recommendations. 

According to the New Hampshire Bureau of Securities Regulation, Merrill Lynch failed to supervise Kenahan when he “traded without authorization, mismarked trade confirmations, excessively traded stocks and initial public offerings, over charged commissions, and inappropriately traded inverse and leveraged products.” Kenahan recommended the purchase of stock in United Kingdom-based Monitise to several investors, despite the fact that Monitise was a security that was not followed by Merrill Lynch research, the New Hampshire regulators alleged. Additionally, New Hampshire regulators alleged that “[t]he misconduct led to high commissions for Merrill Lynch and Kenahan and heavy losses for the investor.”

According to the New Hampshire regulators, the settlement was the largest monetary sanction in the regulator’s history.

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