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Compliance Concepts

A Broker Snuffs Out a Merrill Lynch Career

August 28, 2020

by Howard Haykin



Throughout his 29 years with Merrill Lynch, the broker maintained a clean disciplinary record, dotting every ‘i’ and crossing every ‘t’.  But with just a single screw-up – while accommodating customers – he snuffed out his career and got hit with a $5K fine and a 45-day suspension.



In May 2019, the Houston-based broker violated a Merrill Lynch policy that prohibited brokers from signing a customer's name or copying-and-pasting a previous signature on any document, even if the customer authorized the false signature.


Three of his customers, all beneficiaries of their deceased parents’ IRAs, requested distributions of their inherited shares of the IRAs. To accommodate the customers’ requests and expedite the distributions, the broker suggested and got the customers' permission to have him copy their signatures from other account documents and paste those copied signatures onto Letter of Assignment of Estate forms. However, one month later, Merrill Lynch learned that the broker had violated its restrictive policy and it promptly discharged the broker.



RISK V. REWARD.    Perhaps Merrill Lynch over-reacted to the broker’s violative conduct, and should have 'cut him some slack' in deference to his 29 years of service. But the firm discharged the broker and, in doing so, not only snuffed out his career but flagged his violative conduct to FINRA. The securities regulator, in turn, issued its own sanctions for the broker's violations.   


This case points out the high price that brokers face when they knowingly, foolishly and unnecessarily violate firm policies and industry rules. CUT AND PASTE?  Take a Pass, because 'haste does make waste'.



[For further details on the above case, click on … FINRA Case #2020066576401​.]