Merrill Lynch, Pierce, Fenner & Smith Inc (BofA Securities and Merrill)

Merrill Lynch, Pierce, Fenner & Smith: Mergers and Acquisitions

Merrill Lynch, Pierce, Fenner & Smith, Inc. was founded in 1914. Once a publicly-traded United States investment bank, it was acquired by Bank of America (BAC) in 2008. 

Merrill Lynch merged with Bank of America Securities, LLC to become Bank of America Merrill Lynch (BAML). In 2019, the latter was split into BofA Securities, Inc. and Merrill Lynch, which was rebranded as Merrill.

Bank of America (BofA) Securities

BofA Securities is Bank of America's investment banking division, with its headquarters in New York. It provides prime broker-dealer and broker activities and services related to research, mergers and acquisitions. They also deal in equity and debt capital markets, trading, lending, risk management, and liquidity and payments management.

In 2011, while still called Bank of America Merrill Lynch, Merrill Lynch investing was ranked number two globally. In terms of revenue among other investment banks, the firm had a 7.4% global market share.

Merrill (Formally Known as Merrill Lynch)

Also headquartered in New York, Merrill is BofA’s investing and wealth management division overseeing $2.3 trillion in client assets. Like BofA Securities, Merrill offers prime broker and brokerage firm services. This division also operates an electronic trading platform called Merrill Edge.

Also, under Merrill, there are:

  • Merrill Lynch Wealth Management
  • Merrill Guided Investing
  • Merrill Private Wealth Management for high-net-worth individuals, families, and businesses
Bank of America Acquisition of Merrill Lynch

The acquisition happened during the financial crisis, after the fall of Lehman Brothers saving Merrill Lynch from filing for bankruptcy. At the time, the firm was contending with several very public and high-profile missteps. 

Examples include its involvement as a lead underwriter in the mortgage-based collateralized debt obligation (CDO) market. Many of the CDOs eventually failed. In 2009, Rabobank sued Merrill over the CDO called Norma, and bond insurer MBIA sued over the "ML-Series" CDOs.

Merrill also was accused of misrepresenting the risks involved in mortgage-backed securities (MBS) to investors. According to Bloomberg, in 2008, the firm lost $51.8 billion on these investments during the subprime mortgage crisis.

Our broker fraud lawyers represent retail investors, high net worth individual investors and institutional investors. We help in recovering losses sustained due to broker negligence or misconduct of Bank of America Securities or Merrill stockbrokers.

Critical Recent Disclosures Involving Merrill Lynch

In recent years, Merrill Lynch has been involved in several customer disputes, FINRA arbitration cases and SEC filings. Below are various noteworthy disclosures.

  • 2020: The Financial Industry Regulatory Authority (FINRA) ordered Merrill Lynch to pay over $7.2M in restitution. They would also pay interest to customers who paid unnecessary sales fees and other excessive charges for mutual fund transactions.
  • 2019: Merrill Lynch consented to pay over $8M to settle US Securities and Exchange Commission (SEC). The charges were over the firm's handling of "pre-released" American depository receipts (ADRs) regulators contend that Merrill Lynch improperly borrowed. They were borrowed from brokers that did not own the foreign shares required to support them. As a result, a foreign issuer's tradeable securities were inflated, and abusive practices, including dividend arbitrage and unsuitable short-selling, occurred. The firm consented to disgorge over $4.4M in ill-gotten gains, a $2.89M penalty and $724K in prejudgment interest.
  • 2018: Merril Lynch agreed to pay $42M penalties following SEC charges alleging the firm misled brokerage customers about trading venues.
  • 2018: The SEC fined Merrill Lynch $5.2M for lying to customers about residential mortgage-backed security (RMBS) prices. The firm agreed to repay $10.5M to those financially harmed customers.
  • 2016: Merrill Lynch not only agreed to pay $415M for misusing customer funds but also admitted to wrongdoing. These include participating in specific complex options trades while artificially lowering the required customer cash deposit in a reserve account. The Bank of America subsidiary used billions of dollars freed up by this to fund trading activities between 2009 - 2012.
Experienced Securities Fraud Law Firm

For over 30 years, our securities fraud lawyers have fought for investors. We have collectively recovered millions of dollars for our clients through FINRA arbitration, mediation, and litigation. SSEK Law Firm has the necessary skills, experience, and resources to go after the largest firms on Wall Street.

Are you interested in exploring your legal options?. Contact Shepherd Smith Edwards and Kantas (SSEK Law Firm at at (866) 904-2456 today.

Contact us online to determine whether you have an investor claim related to BofA Securities or Merrill Lynch investment losses.

Shepherd Smith Edwards & Kantas LTD LLP Law Firm Provides Legal Counsel for Claims Against Merrill Lynch
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Our law firm represents institutional and individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts. Our attorneys and staff have more than 100 years of combined experience in the securities industry and in securities law. Several of our lawyers served for years as Vice President or Compliance Officer of brokerage firms.

Each lawyer and staff member of our firm is devoted to assisting investors recover losses caused by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent. We have handled over a thousand cases against hundreds of large and small investment firms, including against Merrill Lynch.

Call us at (800) 259-9010 or contact us through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with an investment advisor or financial firm which resulted in losses.

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