Ex-Merrill Lynch Broker Will Pay $5M Penalty and Serve Time In Prison
A federal judge has sentenced Thomas Buck, an ex-Merrill Lynch broker, to 40 months in prison. Buck pleaded guilty to securities fraud in 2017. As part of his plea, he admitted to lying to Merrill about telling clients about their account options, and, at certain times, making trades for them without getting their approval.
That year, the US Securities and Exchange Commission (SEC) had filed a complaint against Buck accusing him of making over $2.5M in excessive commissions and fees from more than four dozen clients. The SEC contends that Buck placed clients into accounts that charged them commissions instead of ones that were fee-based and not as costly. The regulator also accused him of making unauthorized trades. The Commission barred the former Merrill broker from the investment advisory and brokerage industries last year.
Until Merrill Lynch terminated his employment in 2015, Buck was the firm’s #1 broker in Indiana and at one point oversaw $1.3B in assets under management and 3,000 accounts. Barron’s reports that Buck had about 500 clients that were high net worth clients with millions of dollars.
Buck has agreed to pay a $5M penalty. In addition to his prison term, he must also serve two years of supervised release and fulfill 20 hours of community service.
FINRA Bars Former MML Investors Broker Who Sold Woodbridge Promissory Notes
The Financial Industry Regulatory Authority (FINRA) has barred broker Floyd Powell. The self-regulatory authority (SRO) said that Powell, a former MML Investors Services representative, sold almost $3.5M of promissory notes related to the $1.2B Woodbridge Ponzi Scam that has defrauded thousands of investors, many of them older investors.
Powell is accused of making these private securities transactions, which were unapproved, between 7/2016 and 12/2017. During this time, he was an MSI Financial Services broker. MSI, however, then merged with MML Investors Services.
Powell purportedly sold Woodbridge promissory notes to 13 investors, most of them MSI or MML customers, without telling either broker-dealer that he was going to sell the securities. According to InvestmentNews, Powell made $104K in commissions from the Woodbridge transactions. MML fired Powel last year.
Powell consented to the settlement in FINRA’s case without denying or admitting to the SRO’s findings. He is one of several sales agents to be censured or barred by securities regulators for selling Woodbridge notes.
Former UBS Adviser to Go to Prison for 9 Years for Embezzling from Clients
John Maccoll, an ex-UBS Financial Services (UBS) broker who has already been barred from the industry by both the SEC and FINRA, is now sentenced to nine years in prison. Maccoll, who pleaded guilty to charges accusing him of embezzling over $3.7M from clients, is said to have confessed to his crimes in a lengthy letter to regulators.
Prosecutors accused Maccoll of defrauding clients from 2010 to 2018, during which time he persuaded over a dozen of the firm’s clients to give him their money to invest outside UBS. Instead, he used their money on his own spending.
The earlier civil case brought by the SEC against Maccoll described his victims as mostly older retirees. The regulator accused the ex-UBS broker of promising investors yearly returns of up to 20% and of issuing fake statements to clients.
UBS fired Maccoll last year. A 40-year veteran of the industry, Maccoll was previously a Morgan Stanley (MS) broker for 20 years. He has nearly two dozen disclosures on his BrokerCheck record, including a number of customer disputes that make various allegations against him, including unsuitable recommendations, misrepresentations, excessive trading to make commissions, misappropriation, fraud, unauthorized trades, and mismanagement.
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