Defendant Name: Merrill Lynch, Pierce, Fenner & Smith Incorporated

Defendant Type: Subsidiary of Public Company
Public Company Parent: Bank of America Corporation
SIC Code: 6021
CUSIP: 06050510

Initial Case Details

Legal Case Name In the Matter of Merrill Lynch, Pierce and Fenner & Smith Incorporated
First Document Date 19-Jun-2018
Initial Filing Format Administrative Action
File Number 3-18549
Allegation Type Broker Dealer

Violations Alleged

Securities Act
• Sec 17(a)(2)
• Sec 17(a)(3)

Resolutions

First Resolution Date 19-Jun-2018
Headline Total Penalty and Disgorgement $42,000,000

Related Documents:

33-10507 19-Jun-2018 Administrative Proceeding
Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933, Section 15(b) of the Securities Exchange Act of 1934, and Section 203(e) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order
According to the SEC, "This proceeding concerns Merrill Lynch's sustained efforts to hide its practice of routing certain customer orders to other broker-dealers ("External Liquidity Providers," "Electronic Liquidity Partners," or "ELPs"), including proprietary trading firms and wholesale market makers, for execution."
2018-108 19-Jun-2018 Press Release--Administrative Proceeding
Merrill Lynch Admits to Misleading Customers about Trading Venues
On June 19, 2018, the SEC instituted administrative proceedings against Merrill Lynch, Pierce, Fenner & Smith, stating in a press release: "According to the SEC's order, Merrill Lynch falsely informed customers that it had executed millions of orders internally when it actually had routed them for execution at other broker-dealers, including proprietary trading firms and wholesale market makers. Merrill Lynch called this practice "masking." Masking entailed reprogramming Merrill Lynch's systems to falsely report execution venues, altering records and reports, and providing misleading responses to customer inquiries. By masking the broker-dealers who had executed customers' orders, Merrill Lynch made itself appear to be a more active trading center and reduced access fees it typically paid to exchanges."