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Merrill Lynch to Pay $415 Million for Misusing Customer Cash and Putting Customer Securities at Risk

posted by cmn32480 on Saturday June 25 2016, @09:20PM   Printer-friendly
from the that's-just-fine dept.

n1 writes:

The Securities and Exchange Commission today announced that Merrill Lynch has agreed to pay $415 million and admit wrongdoing to settle charges that it misused customer cash to generate profits for the firm and failed to safeguard customer securities from the claims of its creditors.

An SEC investigation found that Merrill Lynch violated the SEC's Customer Protection Rule by misusing customer cash that rightfully should have been deposited in a reserve account. Merrill Lynch engaged in complex options trades that lacked economic substance and artificially reduced the required deposit of customer cash in the reserve account. The maneuver freed up billions of dollars per week from 2009 to 2012 that Merrill Lynch used to finance its own trading activities. Had Merrill Lynch failed in the midst of these trades, the firm's customers would have been exposed to a massive shortfall in the reserve account.

Source: The Securities and Exchange Commission

Original Submission

 
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  • (Score: 0) by Anonymous Coward on Sunday June 26 2016, @02:09AM

    by Anonymous Coward on Sunday June 26 2016, @02:09AM (#365870)

    Back in the day, Pierce, Fenner and Smith would have put a stop to such nonsense.

  • (Score: 2, Funny) by redneckmother on Sunday June 26 2016, @05:34AM

    by redneckmother (3597) on Sunday June 26 2016, @05:34AM (#365923)

    Back in the day, Pierce, Fenner and Smith would have put a stop to such nonsense.

    Too bad. Now we're stuck with Dewey, Cheatham, and Howe.

    --
    Mas cerveza por favor.