The Financial Industry Regulatory Authority sanctioned a former Merrill Lynch representative for signing 15 subscription agreements with a non-affiliated third-party investment advisor on behalf of Merrill without authorization and then failing to comply with a direction from management to stop violating its rules, according to FINRA.
Without admitting or denying the findings, Thomas M. Murphy signed a FINRA letter of acceptance, waiver and consent Jan. 31 in which he agreed to a four-month suspension from associating with any FINRA member firm and pay a $5,000 fine. FINRA accepted the letter Tuesday.
Murphy is no longer registered as a broker, according to FINRA’s BrokerCheck website. However, he has been serving as a registered investment advisor for Charlesworth & Rugg since 2018, according to the Securities and Exchange Commission website.
Merrill declined to comment Wednesday. Scott G. Grubin, a partner at law firm Barton LLP who represented Murphy, didn’t immediately respond to a request for comment.
In September 2014, while serving as a registered representative in Merrill’s self-directed brokerage business, Murphy was approached by a Merrill client who sought his help in transferring cash from her existing self-directed Individual Retirement Account at the firm to an account at a third-party fund manager for the purpose of making a qualified investment in a private real estate fund outside of her account, according to the FINRA AWC letter.
In assisting the client, Murphy signed the fund’s subscription agreement as an “authorized signatory” of Merrill in its capacity as custodian of the client’s IRA.