Bank of America’s Merrill Lynch brokerage unit has agreed to pay $2.5m to the state of Massachusetts to settle allegations that it failed to follow its own compliance rules.
The charges comprise the brokerage firm’s failure to supervise internal presentations made during meetings of over 300 financial advisors and other staff in Boston.
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The presentation, which was aimed at helping financial advisers double production, included a section discussing transferring client assets from commission-based brokerage accounts to fiduciary fee-based accounts but did not include language about clients’ suitability for such switches, according to Secretary of the Commonwealth William Galvin.
Galvin said: "Merrill may have on the books stringent rules on adhering to regulatory duties and obligations but by not discussing them explicitly in this presentation on ‘doubling production,’ Merrill created a risk the attendees could have been misinterpreted the double production presentation included in the OPM Tools Presentations."
A Bank of America spokesperson said: "We are reiterating to our employees the need to have internal presentations properly approved before their use."
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