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NEWARK
– Merrill, Lynch, Pierce, Fenner and
Smith, Inc. (“Merrill Lynch”)
will pay New Jersey $728,260 in civil penalties
and revise its business practices to comply
with state laws and regulations, under terms
of an Administrative Consent Order entered
today, according to Attorney General Paula
T. Dow and Marc B. Minor, Chief of the New
Jersey Bureau of Securities.
The
settlement follows a multi-state investigation
which resulted in an Administrative Consent
Order between New Jersey and Merrill Lynch.
According to the order, the investigation
revealed that from at least January 1, 2004
through the present, Merrill Lynch employed
Client Associates who conducted sales of
securities in states without being registered
as agents in those states as legally required.
The order also sets forth that the N.J.
Bureau of Securities found that Merrill
Lynch failed to adequately supervise Client
Associates and enforce its own established,
written procedures.
“The
Bureau of Securities has acted to protect
investors and to ensure legal compliance
by companies that operate in New Jersey,”
Attorney General Dow said. “This settlement
underscores how vital the work of state
securities regulators is, especially during
these difficult financial times.”
Merrill
Lynch cooperated with investigators and
has implemented revised business practices,
including a system to monitor the status
of persons who accept client orders. Approximately
700 Client Associates employed in New Jersey
have been registered as agents following
the investigation.
“Investors
deserve and expect that their trading is
being conducted by registered agents. Encouraging
New Jersey investors to make sure their
brokers are registered becomes meaningless
if firms allow those brokers to pass off
trading to employees lacking necessary registrations
in the name of cutting corporate costs,”
Minor said.
The
multi-state investigation into Merrill Lynch
began in the summer of 2008.
The
N.J. Bureau of Securities can be contacted
toll-free within New Jersey at 1-877-I-INVEST
(1-877-446-8378) or from
outside New Jersey at 973-504-3600.
The Bureau's web site is located at www.njsecurities.gov.
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