Merrill Lynch has been fined $1m and ordered to pay over $320,000 in compensation, by the US financial watchdog.
The Financial Industry Regulatory Authority (FINRA) handed down the ruling after the bank did not provide customers best rates on non-convertible preferred securities transactions on its ML BondMarket System.
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FINRA also found that Merrill Lynch’s supervisory system relating to ML BondMarket was lacking and failed to perform any post-execution review on transactions executed.
On top of the fine FINRA will require Merrill Lynch to revise its supervisory procedures in regards to the system within 30 business days.
Merrill Lynch had not responded to a request for comment at the time of posted. Media reports said Merrill Lynch did not challenge the ruling.
Thomas Gira, FINRA executive vice president and head of market regulation, said it was imperative broker-dealer systems gave customer fair prices on their transactions.
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By GlobalData"Merrill Lynch lacked the necessary systems and supervision to ensure that it provided customers with the best execution of their non-convertible preferred securities transactions which resulted in many customers receiving inferior prices for more than four years."
