FINRA Fines Merrill Lynch $1.9 Million Over Former GM Notes

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Merrill Lynch, Pierce, Fenner & Smith has been fined $1.9 million for fair pricing and supervisory violations in connection with more than 716 retail customer transactions in distressed securities and ordered to pay $540,000 to affected customers. The Financial Industry Regulatory Authority found that Merrill Lynch purchased notes from Motors Liquidation Company, the name General Motors went by after its bankruptcy, from customers at prices ranging from 5.3% to 61.5% below market price and sold the notes to other broker-dealers at prevailing market price. FINRA also alleged that Merrill Lynch did not conduct post-trade best execution or fair pricing reviews for these transactions. Merrill Lynch is required to provide three reports in the next 18 months on its supervisory system for transactions executed by its credit desk. Merrill Lynch, a unit of Bank of America , did not admit or deny the findings.

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