Are you in compliance?

Don't miss out! Sign up today for our weekly newsletters and stay abreast of important GRC-related information and news.


Status message

Start your free, no obligation 5-day trial to continue exploring with full access.

Merrill Lynch to pay $15M for failure to supervise RMBS traders

Jaclyn Jaeger | June 12, 2018

The Securities and Exchange Commission announced on June 12 that Merrill Lynch will pay more than $15 million to settle charges that its employees misled customers into overpaying for Residential Mortgage Backed Securities (RMBS). Merrill Lynch agreed to repay more than $10.5 million to its customers and to pay penalties of approximately $5.2 million.

In its order, the SEC found that Merrill Lynch traders and salespeople convinced the bank’s customers to overpay for RMBS by deceiving them about the price Merrill Lynch paid to acquire the securities. The SEC order also found that Merrill Lynch’s RMBS traders and salespeople 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 compliance and surveillance procedures in place that were...

Read this single article for $49, or click the subscribe button below to review subscription options.

Enjoy unlimited access to thousands of articles, browse five years of digital magazines, qualify for reduced admission to events, and more.