The Financial Industry Regulatory Authority has suspended a former Merrill Lynch rep for nine months and fined him $5,000 for making misleading or false statements about the availability of a client's funds for buying a home.
"From December 2023 to January 2024, without Merrill Lynch's knowledge or approval, [Mark S.] Sorrell prepared, signed, and disseminated from his firm email address three proof of funds letters to a third party on behalf of his customer concerning funds the customer was going to use to purchase a home," according to FINRA's order.
On Sept. 16, 2024, Merrill Lynch filed a Form U5 disclosing Sorrell's termination based on "[c]onduct including providing an inaccurate proof of funds letter on behalf of a client." Sorrell joined Merrill in Houston in September 2015, his BrokerCheck records show.
FINRA's involvement in the matter originated from the agency's review of the Form U5. Sorrell accepted and consented to FINRA's findings without admitting or denying them.
As FINRA explains, a proof of funds letter is a written verification confirming that a client has sufficient assets to complete a specific transaction, typically in connection with mortgage applications, audits and other third-party requests.
Merrill Lynch's written supervisory procedures required registered reps to obtain supervisory review and approval prior to distributing any proof of funds letters on behalf of a client. In the letters, Sorrell made materially misleading or false statements about the availability of the customer's funds for purchasing the home.
"For example, Sorrell stated that he knew the customer had sufficient funds to complete the transaction even though the customer lacked sufficient funds at the firm and Sorrell never verified whether the customer held sufficient funds elsewhere," FINRA said.
"Sorrell also falsely represented that the customer had generated sufficient funds to purchase the home through the sale of a bond held outside the firm even though, as Sorrell was aware, the customer had not sold the bond," the order states.
Prior to his work for Merrill, Sorrell worked for Barclay's Capital (2009-2015), Sanford C. Bernstein (2005-2008) and Horne Securities (1983-1986).
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