FINRA Sanctions Two Brokers over UIT Sales at Merrill

cropped-High-Res-TA-2018-2019-284x300According to Advisor Hub and other industry news sources the Financial Industry Regulatory Authority levied sanctions against Merrill Lynch and two of its brokers over allegedly early rollovers of Unit Investment Trusts.

Miller Stern Lawyers is currently investigating matters pertaining to early rollovers of Unit Investment Trusts and other such practices. According to the reports from Finra, it finalized its sanctions against Merrill, and accepted a settlement letter from a 30-year Merrill veteran in Chattanooga, Tennessee, and another from a 35-year industry veteran in Charlotte, North Carolina.

According to the regulators information, including CRD information, both the brokers, Kelly Wayne Feehrer in Tennessee and Scott R. Mathews, who joined Merrill in 2009, agreed to three-month suspensions and $5,000 in fines for allegedly unsuitable UIT switch recommendations.

The allegations contend that between January 2011 and December 2015, the broker allegedly suggested more than 200 of his customers exchange their UIT investments prior to their 15 to 24-month maturity date and use the proceeds to purchase a new UIT sometimes with the same investment objective.

One of the brokers allegedly made 3,000 such recommendations, which could have generated additional sales charges between 2.95% and 12.8% depending on how frequently the products were exchanged, according to Finra. The average hold time was “only” 215 days, Finra suggested.

The other broker allegedly recommended 1,800 such switches over the same timeframe, according to a separate letter of acceptance waiver and consent.

According to industry documents, both of the Merrill brokers CRD# 1470328 and CRD# 1314735 accepted the penalties without admitting or denying Finra’s charges.

Finra’s larger global investigation of UIT (Unit Investment Trusts) violations has encompassed brokerage firms of all sizes as well as dozens of individuals who have faced similar fines and suspensions, according to FINRA.

According to FINRA there are over $2.5 billion worth of potentially improper UIT rollovers that Finra alleged Merrill processed between January 2011 and December 2015.

Miller Stern Lawyers, LLC, a Baltimore Securities Fraud Law firm, currently represents investors for claims of investment losses from UIT switching, unauthorized trading, over concentration, irregular options trading, margin and unsuitability claims, broker fraud, securities fraud, securities litigation and other broker and broker/dealers for investment losses and fraud.  If you or anyone you know have experienced investment losses from the actions above or other situations, please call 410-LAW-FIRM ( 410-529-3476 ) or fill out the contact us form for a no cost consultation and evaluation of your claim.

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