Merrill Lynch penalised $6m for IPO sales to insiders

Bank of America’s Merrill Lynch unit agreed to pay about $6m to settle Financial Industry Regulatory Authority allegations that it improperly sold shares in initial public offerings to industry insiders, the industry-backed regulator said on Thursday.

Merrill Lynch made at least 1 462 prohibited sales in 325 different offerings from 2010 through March of this year in IPOs including those of Facebook, General Motors, LinkedIn and Twitter, Finra said in a statement. The company agreed to resolve the case without admitting or denying wrongdoing.

More than 100 different Merrill employees sold the shares to insiders including immediate family members and customers of other brokerage firms, Finra said. The regulator said the company lacked supervisory systems that could have prevented the conduct.

"IPO shares sold to industry insiders are unavailable to investors who might otherwise have purchased them," Susan Schroeder, Finra’s executive vice president in Department of Enforcement, said in the statement.

"Merrill Lynch knew or should have known that these customers were restricted from IPO purchases, but repeatedly sold them shares in violation of FINRA rules."

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
18.15
-0.8%
Rand - Pound
20.13
-0.2%
Rand - Euro
17.68
-0.3%
Rand - Aus dollar
11.55
-0.0%
Rand - Yen
0.12
-0.6%
Gold
1,694.80
-1.1%
Silver
20.13
-2.6%
Palladium
2,192.88
-3.1%
Platinum
916.50
-1.0%
Brent Crude
94.42
+1.1%
Top 40
59,280
-0.2%
All Share
65,676
-0.2%
Resource 10
63,294
+0.0%
Industrial 25
79,505
-0.7%
Financial 15
14,072
+0.5%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders