Reuters: Regulatory News: UPDATE 1-Merrill fined $500,000 for not filing reports-FINRA

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UPDATE 1-Merrill fined $500,000 for not filing reports-FINRA Sep 24th 2012, 15:28 Sept 24 | Mon Sep 24, 2012 11:28am EDT Sept 24 (Reuters) - Merrill Lynch accepted a $500,000 fine to settle charges that it failed to file, or was late with, hundreds of required reports about its brokers, including details of customer complaints, Wall Street's industry-funded watchdog announced Monday. In addition, Merrill Lynch, a unit of Bank of America Corp, did not properly supervise or train employees who were responsible for tracking and reporting complaints about brokers, said the Financial Industry Regulatory Authority (FINRA), which also censured Merrill. The firm's conduct, which occurred between 2005 and 2011, included not notifying FINRA about 650 reports, ranging from arbitration claims filed by customers to settlements reached by the brokerage, according to a regulatory document. Securities industry rules require brokerages to disclose certain information about its brokers, including criminal and civil complaints involving them, typically within 30 days. Those details are available in databases for regulators, other securities brokerages, and investors. Brokerages must also submit a form to the regulator when it hires a new broker or when a broker leaves. Merrill's violations may have prevented investors from fully researching the backgrounds of certain brokers through FINRA's database for investors, known as BrokerCheck, FINRA said. The brokerage learned of the problems during an internal review that began in 2009, according to Merrill spokesman, William Halldin. "We have enhanced our policies and procedures to address issues raised in this matter and to ensure that client complaints are properly reported," Halldin said. Among the problems: The firm was late or failed to report certain criminal and civil complaints it received about brokers during a three-year period, according to FINRA. Merrill self-reported its problems to FINRA, according to its settlement with the regulator. As part of the settlement, Merrill neither admitted nor denied the charges, but consented to FINRA's findings. Link this Share this Digg this Email Reprints

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