The Financial Industry Regulatory Authority has suspended a former Merrill Lynch representative for six months and ordered him to pay $7,500 for failing to disclose an outside business activity, saying he directed Merrill clients seeking loans to a lender owned by his brother-in-law.
According to FINRA’s order, Jeremiah Edward Householder first registered with FINRA as a general securities rep in March 2019 through an association with Merrill Lynch. In November 2024, Merrill Lynch filed a Form U5 on Householder's behalf, disclosing that he had voluntarily terminated his association with the firm while he was under internal review for "conduct involving failure to disclose outside business activities."
Between September 2023 and May 2024, while registered with FINRA, Householder engaged in an outside business activity for compensation without providing written notice to Merrill Lynch, the order states.
“While registered with Merrill Lynch, Householder was responsible for working with firm customers who had banking needs, including customers who needed loans, and connecting those customers with the relevant personnel at the firm's banking affiliate,” the order states.
According to FINRA, Householder referred four Merrill Lynch customers who sought loans from Merrill to a third-party lending company owned by his brother-in-law without Merrill's approval, receiving about $60,000 in compensation.
In his March 2024 annual compliance certification, FINRA states, Householder falsely attested that he was not engaged in any undisclosed outside business activities.
As a result, Householder violated Rules 3270 and 2010, FINRA found.
The matter originated from the Form U5 filed by Merrill.
Throughout the relevant period, Merrill Lynch's written supervisory procedures required registered reps to provide written notice to the firm before engaging in any outside business activity and prohibited registered reps from engaging in such activity unless and until they had received approval from the firm.
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