Commissioner William P. White of the DC Department of Insurance, Securities and Banking (DISB) recently signed a Consent Order regarding Merrill, Lynch, Pierce, Fenner & Smith Inc. (Merrill Lynch) allowing its client associates to sell securities without being properly licensed. The multi-state task force settlement concludes an investigation led by state securities regulators.
“District law requires that a person may not accept orders without being licensed as a broker-dealer or agent,” said DISB Commissioner White who signed the order Oct. 24, 2011. The Consent Order finds that while Merrill Lynch’s policies require client associates be licensed in the appropriate jurisdictions, Merrill Lynch’s supervisory system did not ensure client associates fully complied with licensing requirements. Merrill Lynch agreed to the settlement without admitting or denying the findings in the Consent Order.
As part of the settlement, Merrill Lynch agreed to cease and desist from engaging in the sales of securities in the District of Columbia by persons not licensed in the District of Columbia, and to immediately establish and maintain a trade monitoring system that ensures proper licensing in every jurisdiction.
The District of Columbia received $434,215 as its share of the $26.5 million national settlement that Merrill Lynch has agreed to pay to the states.
Commissioner White noted that this settlement underscores DISB’s commitment to ensuring that firms licensed to engage in any financial-services business in the District of Columbia comply with all applicable requirements.