A Merrill Lynch branch office (Photo: AP) Merrill Could Pay $82M for Broker's Excessive Trading
The firm will pay $40 million in one case against the broker, and another is pending.
July 22, 2019 at 03:36 PM
2 minute read
Broker Dealers
The original version of this story was published on Law.com
A former Merrill Lynch advisor's overzealous trading has cost the firm $40 million in a recent settlement, but a second dispute could put it on the hook for further settlements of nearly $43 million.
The fired advisor, Charles Kenahan, had been in the industry for 35 years. He spent the past 12 at Merrill Lynch, but also has worked for Morgan Stanley, Bear Stearns and several other broker-dealers since 1985.
The June settlement over "unsuitable investment recommendations, excessive trading and misrepresentation from February 2012 until December 2017," according to FINRA records, was first reported by MSNBC on Friday.
The individual who brought the allegations against Kenahan is Robert Levine, a co-founder of the now defunct Cabletron Systems, MSNBC's report said.
The settlement of $40 million was reached on June 12 for the allegations brought by the investor in March 2018. The pending allegations, brought before the Financial Industry Regulatory Authority in 2018, concern churning from 2007 to 2018.
Merrill declined to comment on the matter.
Also last month, FINRA sanctioned Summit Brokerage Services $880,000 for supervisory failures related to excessive trading from 2012 to 2017.
— Check out FINRA Hits Summit With $880K Fine Over Excess Trading on ThinkAdvisor.
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