According to Advisor Hub, the Financial Industry Regulatory Authority has censured and imposed a $950,000 fine on Merrill Lynch Wealth Management for allegations that they engaged in ignoring flaws in its fraud detection systems allowed for two of their brokers to steal $6 million from clients.
“Merrill’s systems did not properly screen Automated Clearing House transfers from customers’ accounts to detect when one of its registered representatives was the beneficiary of those transfers,” FINRA said. Merrill’s internal fraud-detection system was only “designed to detect fraud by third parties” or “persons other than its own brokers,” it continued.