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January 06, 2020 at 03:03 PM
FINRA office in New York. (Photo: Ron Pechtimaldjian)
The Financial Industry Regulatory Authority fined and censured Merrill Lynch over alleged violations of two Municipal Securities Rulemaking Board Rules concerning municipal security minimum denominations, according to FINRA.
FINRA claimed Merrill violated MSRBG-15(f), which prohibits a broker, dealer or municipal securities dealer from effecting a customer transaction in municipal securities in an amount lower than the issue’s minimum denomination, and MSRB Rule G-47, which requires customers to be informed when that happens.
Without admitting or denying the findings, Merrill Lynch signed a FINRA letter of acceptance, waiver and consent Dec. 17 in which the firm agreed to the censure and a $150,000 fine that included $130,000 for violating Rule G-15(f) and $20,000 for violating Rule G-47. FINRA accepted the letter Friday.
From July 1, 2015 through June 30, 2018, Merrill “executed 105 customer transactions in a municipal security in an amount lower than the issue’s minimum denomination in violation of” Rule G-15(f), according to the FINRA AWC letter.
In 20 of those instances, Merrill “failed to inform its customer at the time of trade that the municipal securities transaction was in an amount below the issue’s minimum denomination,” violating Rule G-47, according to the letter.
