When you invest with a major investment firm like Merrill Lynch, you expect your money to be safe. You expect Merrill Lynch to follow the rules, and you expect the firm鈥檚 advisors to make investment decisions with your best interests in mind.
Unfortunately, this isn鈥檛 always the case. Merrill Lynch鈥攍ike many other major investment firms鈥攈as faced numerous complaints over the past several years. This includes a complaint that led to a with the U.S. Securities and Exchange Commission (SEC) for 鈥渕isusing customer cash and putting customer securities at risk.鈥 We regularly hear from investors who have lost money with Merrill Lynch, and we have investigated and successfully pursued claims against the firm on multiple occasions.
How Do I File a Complaint Against Merrill Lynch?
For most individual investors filing a complaint against Merrill Lynch will involve going to FINRA arbitration. The Financial Industry Regulatory Authority (FINRA) works with the SEC to regulate the securities industry, and it provides an arbitration forum for investors to pursue claims against their investment firms and advisors.
On FINRA BrokerCheck, Merrill Lynch has. This only includes cases filed against the main Merrill Lynch entity. The firm has had numerous affiliates and subsidiaries over the years and far more individual investment advisors.
While investors can pursue FINRA arbitration on their own, this is not the best choice鈥攅specially when dealing with a major investment firm like Merrill Lynch. There are strict procedural requirements, and investors must be able to prove both (i) that their investment losses are fraudulent and (ii) how much they are entitled to recover. Firms like Merrill Lynch have teams of defense lawyers, and they deploy these teams to overwhelm investors who attempt to assert their legal rights.
Engaging an investment fraud law firm to represent you helps turn the tables in your favor. You can hire your lawyers to handle your FINRA arbitration claim鈥攁nd you can do so at no out-of-pocket cost. Even when taking contingency fees into account, engaging a law firm to represent you is typically the best way to maximize your financial recovery.
Can I Sue Merrill Lynch?
If you believe that you have suffered fraudulent investment losses with Merrill Lynch, suing the firm may be an option. However, rather than going to court, filing a claim in FINRA arbitration may be the best route to recover your investment losses. Investment firms like Merrill Lynch are required to submit to arbitration for investor claims, and FINRA arbitration is faster and involves fewer costs than pursuing litigation in state or federal court.
While FINRA arbitration is quicker and less expensive than litigation in court, defrauded investors can seek the same remedies in both venues. As a result, you are not giving anything up by taking advantage of the benefits of arbitration. If you need to know more about filing a claim against Merrill Lynch, you should consult with an investment fraud lawyer promptly.
What was the Merrill Lynch Scandal?
Merrill Lynch has been through more than its fair share of scandals. One of these scandals resulted in the firm鈥檚 $415 million settlement with the SEC in 2016. Following an SEC investigation, Merrill Lynch agreed to settle the Commission鈥檚 charges that the firm 鈥渕isused customer cash to generate profits for the firm and failed to safeguard customer securities from the claims of its creditors.鈥
Among other things, the SEC鈥檚 investigation found that Merrill Lynch put customers鈥 funds at risk by 鈥渆ngag[ing] in complex options trades [with customer funds] that lacked economic substance.鈥 According to the Commission, if Merrill Lynch had failed while these trades were pending, its customers 鈥渨ould have been exposed to a massive shortfall.鈥 The SEC also found that the firm held as much as $58 billion worth of customers鈥 securities in an account that was subject to a lien by the firm鈥檚 bank.
Two years later, Merrill Lynch entered into a with the SEC following allegations that the firm 鈥渇alsely informed customers that it had executed millions of orders internally when it actually had routed them for execution at other broker-dealers.鈥 In connection with this scandal, the SEC found that the firm reprogrammed its systems to generate false reports, altered records and reports, and provided misleading responses to customer inquiries.
These are just two examples. Additional recent scandals in which Merrill Lynch has been involved include:
- Being part of a with the SEC in 2022 related to 鈥渨idespread recordkeeping failures.鈥
- Settling SEC charges of failing to disclose conflicts of interest to its customers for in 2018.
- Entering into a with the SEC in 2018 over allegations that the firm misled customers into overpaying for residential mortgage-backed securities.
Merrill Lynch has settled numerous other allegations with the SEC as well, and it has faced far more allegations from its customers in private litigation and FINRA arbitration.
What Happened to Merrill Lynch During the Financial Crisis?
Like many investment firms, Merrill Lynch faced significant struggles during the financial crisis of 2008. However, Merrill Lynch鈥檚 struggles were even greater than most, as the firm was in a long-running court battle with several plaintiffs, including the State Teachers Retirement System of Ohio and the Teacher Retirement System of Texas, who were reportedly planning to seek $20 billion at trial.
With Merrill Lynch reportedly just days away from financial collapse, the firm agreed to a $50 billion takeover by Bank of America. This saved Merrill Lynch, and Bank of America subsequently entered into a confidential settlement related to the firm鈥檚 pending litigation.
Schedule a Free Consultation at AV短视频
Do you have an investment fraud claim against Merrill Lynch? If you are a Merrill Lynch customer and you have suffered losses that you have reason to believe may be fraudulent, you should consult with a lawyer promptly. To schedule a free consultation at AV短视频, call us at 212-742-1414 or tell us how we can reach you online today.