Earlier this year, the US Securities and Exchange Commission barred ex-RBC broker Thomas Buck from the industry. The action came less than four months after the regulator filed a civil case accusing Buck of investor fraud. He allegedly made material misrepresentations and omissions to investment advisory clients and certain customers while he was a Merrill Lynch financial adviser in order to get get paid excess fees and commissions.
As a result, more than 50 customers and clients under Buck ended up paying over $2.5M unnecessarily.
Buck also allegedly did not tell clients that they could have saved money if only they’d opted for a fee-based payment structure instead of the commission model. Meantime, he’d told Merrill Lynch compliance staff on several occasions that the clients knew about the less costly options.
Merrill Lynch fired Buck, who was the brokerage firm’s leading Indiana financial adviser, in early 2015. RBC Wealth Management then hired him. However, in the wake of his firing, Buck was named in numerous customer complaints over the same allegations. While he has settled some of the unauthorized trading and unsuitable investment cases, Buck chose to fight the others.
FINRA Bars Buck Over Unauthorized Trading
In July 2015, the Financial Industry Regulatory Authority barred Buck from associating with any firm that was a member of FINRA because the self-regulatory firm believed that he had engaged in unauthorized trading and had improperly charged clients. Buck did not deny or admit to the SRO’s charges, but he accepted the bar.
The SEC in its civil case also accused Buck of making certain trades in certain client accounts without getting the customers’ authorization. To settle the Commission’s claims Buck agreed to pay over $5M.
The SEC’s complaint was brought at the same that the US Attorney’s Office for the Southern District of Indiana filed a parallel criminal case against Buck. Prosecutors accused him of defrauding clients through the excessive commissions that he charged them. Buck pleaded guilty to one count of securities fraud.
Inadequate Supervision Allegations
While the regulator and criminal cases against Buck may have been settled, questions remain about whether Merrill Lynch, now a Bank of America (BAC) division, should be held liable for the alleged failure to supervise him. At Shepherd Smith Edwards and Kantas, LTD LLP, we pursue inadequate supervision claims against brokerage firms who fail in their fiduciary obligation to oversee all business transactions conducted by their employees. When a financial adviser or broker commits fraud under a broker-dealer’s watch, investors that suffered losses may have grounds for a securities claim against the firm and the financial representative.
If you are an investor whose accounts were overseen by Thomas Buck, you may have grounds for an investment fraud case against Buck and Merrill Lynch. Our investor lawyers are looking into securities claims involving Buck and his former broker-dealer. Your first consultation with Shepherd Smith Edwards and Kantas, LLP, is a free, no obligation assessment.
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