The US Financial Industry Regulatory Authority (FINRA) has slammed Bank of America’s Merrill Lynch with a fine of $8 million in addition to $24.4 million in restitution to settle the allegations that it overcharged for certain charities and retirement accounts.
The regulator stated that the company has failed to waive mutual fund sales charges to 41,000 small business retirement plans, and nearly 6,800 charities and 403(b) retirement plan accounts at various times since at least January 2006.
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The FINRA has accused that although the company had realized that its small business retirement plan customers have been overpaying in 2006, it failed to intimate the regulator about the issue for over five years. Merrill Lynch, moreover, continued overcharging its customers.
FINRA executive vice president and chief of enforcement Brad Bennett said Merrill Lynch failed to offer available waivers to customers, including small business retirement accounts and charitable organizations.
"FINRA’s commitment to investor protection is highlighted by the significant restitution component of this settlement, which reinforces that investors must be able to trust that their brokerage firm will offer the lowest-cost share classes available to them. When firms fail to do so, we will take appropriate action," added Bennett.
The $24.4 million in restitution is in addition to $64.8 million Merrill Lynch has already repaid to affected investors, taking its total restitution to $89.2 million.
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By GlobalData
