{"id":5715,"date":"2014-10-28T00:00:00","date_gmt":"2014-10-28T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2014\/10\/finra_fines_merrill_lynch_6m_f"},"modified":"2022-05-06T12:04:24","modified_gmt":"2022-05-06T17:04:24","slug":"finra-fines-merrill-lynch-6m-f","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/finra-fines-merrill-lynch-6m-f\/","title":{"rendered":"FINRA Fines Merrill Lynch $6M For Supervisory Failures and REG SHO Violations"},"content":{"rendered":"\n

The Financial Industry Regulatory Authority is fining and censuring Merrill Lynch, Pierce, Fenner & Smith Incorporated $2.5M for not setting up, maintaining, and enforcing supervisory procedures and systems related to certain areas, including Regulation SHO. The self-regulatory organization is fining Merrill Lynch Professional Clearing Corp. $3.5M, also for Reg SHO violations. Bank of America (BAC)<\/a>, which acquired Merrill Lynch in 2008, will pay the $6M fines to FINRA. <\/p>\n

Reg SHO is an SEC rule governing short sales. One of its purposes is to curb abusive naked short selling. The regulation also seeks to lower the incidents of sellers neglecting to deliver securities in a timely manner by requiring firms to timely \u201cclose out\u201d fail-to-deliver positions by purchasing or borrowing securities of similar type and quantity. It lets firms reasonably allocate fail-to-deliver positions to brokerage firm clients that contributed or caused those positions. <\/p>\n

According to the SRO, from 9\/08 through 7\/12, Merrill Lynch PRO failed to close out certain fail-to-deliver position, and, for most of that period, lacked the necessary procedures and systems to handle REG Show close-out requirements. FINRA said that from 09\/08 through 3\/011, the firm\u2019s supervisory systems and procedures were not sufficient, making it possible for the firm to improperly allocate fail-to-deliver positions to the brokerage firm\u2019s clients on the basis of clients\u2019 short positions while not having to heed clients played a part in the fail-to-deliver positions. <\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

The Financial Industry Regulatory Authority is fining and censuring Merrill Lynch, Pierce, Fenner & Smith Incorporated $2.5M for not setting up, maintaining, and enforcing supervisory procedures and systems related to certain areas, including Regulation SHO. The self-regulatory organization is fining Merrill Lynch Professional Clearing Corp. $3.5M, also for Reg SHO violations. Bank of America (BAC), […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3751,3752,3739,3800],"tags":[3455],"class_list":["post-5715","post","type-post","status-publish","format-standard","hentry","category-bank-of-america","category-financial-firms","category-finra","category-merrill-lynch","tag-reg-sho"],"yoast_head":"\nFINRA Fines Merrill Lynch $6M For Supervisory Failures and REG SHO Violations — Investor Lawyers Blog — October 28, 2014<\/title>\n<meta name=\"description\" content=\"The Financial Industry Regulatory Authority is fining and censuring Merrill Lynch, Pierce, Fenner & Smith Incorporated $2.5M for not setting up, — October 28, 2014\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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