The Financial Industry Regulatory Authority (FINRA), Wall Street's industry-funded regulator, fined Bank of America Corp's Merrill Lynch unit $1.9 million for unfair pricing related to the purchase of distressed securities over two years.
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Merrill Lynch's global banking and markets credit trading desk had bought senior notes of Motors Liquidation Co , formerly General Motors Corp, at 5.3 percent to 61.5 percent below the market price in more than 700 retail customer transactions, FINRA said.
The regulator ordered Merrill Lynch to pay more than $540,000 in restitution, plus interest, to affected customers.
FINRA said Merrill Lynch did not have an adequate supervisory system to review fair pricing, and ordered the bank to provide three reports over the next 18 months regarding the effectiveness of the system. (Reporting by Abhirup Roy in Bengaluru; Editing by Ted Kerr)