|
The
Financial Industry Regulatory Authority said Merrill did not
admit or deny wrongdoing in agreeing to the payout, which
includes restitution and interest. No fine was imposed.
FINRA said Merrill had maintained an automated system designed
to limit customers' purchases of Class C mutual fund shares when
cheaper Class A shares were available.
Class A shares carry front-end sales charges. Class C shares
typically do not, but impose higher fees and expenses that over
longer periods of time can make them more expensive to own.
FINRA said Merrill's system often failed to limit purchases of
Class C shares, causing customers to pay $13.4 million of
unnecessary fees and expenses from January 2015 to January 2021.
As part of the settlement, Merrill agreed to convert customers'
Class C shares to Class A shares where appropriate.
FINRA said the lack of a fine reflected Merrill's "extraordinary
cooperation," including its hiring an outside consultant to find
affected customers and establishment of a remediation plan.
Merrill Wealth Management ended March with $3.12 trillion of
client balances.
Bank of America said in a statement that it "proactively
detected" the problem, reported it to FINRA, and implemented
enhancements to address it.
FINRA is an independent nonprofit that recently regulated about
3,400 securities firms.
(Reporting by Jonathan Stempel in New York; editing by Jonathan
Oatis)
[© 2022 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
