FLORIDA MERRILL LYNCH BROKER CHARLES EUGENE BISHOP JR. FINED AND SUSPENDED FOR ATTEMPTING TO MISAPPROPRIATE $3 MILLION FROM ELDERLY CLIENT

Charles Eugene Bishop Jr. has been fined $7,500 and suspended for two years by the Financial Industry Regulatory Authority (FINRA) for attempting to misappropriate approximately $3 million from an elderly client while he was at Merrill Lynch. FINRA's findings stated that Mr. Bishop generated paperwork by which the deceased client's assets would be transferred to a purported entity that was never formed, but whose name was identical to a company the client owned, with a tax identification number assigned by the IRS to a different entity that was never formed, but whose sole member was Mr. Bishop.
In order to carry out his scheme, Mr. Bishop had the client sign a firm form that designated Mr. Bishop's entity. Even though the client's signature was notarized, the client was not present when the form was notarized by the notary. In addition, the tax identification number on another firm form the client signed was changed to the tax identification number associated with Mr. Bishop's entity. Furthermore, the findings stated that after the client passed away, Mr. Bishop filed a notice, through his attorney, with his state's probate division asserting that he had an interest in the deceased client's estate as beneficiary. The court eventually issued an order invalidating the beneficiary designations after Mr. Bishop was terminated from Merrill Lynch.
Broker-dealers must establish and implement a reasonable supervisory system to protect clients from fraudulent practices by their brokers. If broker-dealers do not establish and/or implement a reasonable supervisory system, they may be liable to investors for damages. Therefore, investors who have suffered damages resulting from the misappropriation of their funds by their broker can bring forth claims to recover losses against their broker-dealer for failure to prevent such illegal activity.
Have you suffered damages resulting from a misappropriation of your funds by your broker? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

BANK OF AMERICA MERRILL LYNCH HIT WITH $1.3 MILLION ARBITRATION ORDER IN FLORIDA FOR FANNIE MAE PREFERRED STOCK SALES

Bank of America Merrill Lynch has been ordered to pay a $1.3 million arbitration award to a couple whose broker, Miles Pure, sold them Fannie Mae preferred stock. Although multiple warnings of its risks were apparent, including a sell rating from Merrill Lynch's own analysts, Mr. Pure sold Robert and Michelle Billings $2.3 million in Fannie Mae preferred shares two months before Fannie Mae collapsed and was placed into conservatorship. Also, just two weeks before the Billingses purchased the shares, Moody's downgraded Fannie Mae preferred stock, and Merrill Lynch removed the shares from its recommended list due to significant concerns about the company. The Billingses ended up losing their entire investment.
A fiduciary duty is an obligation to act in the best interest of another party. A fiduciary obligation exists whenever the relationship with the client involves a special trust, confidence, and reliance on the fiduciary to exercise his discretion or expertise in acting for the client. The fiduciary must exercise all of the skill, care and diligence at his disposal when acting on behalf of the client. A person acting in a fiduciary capacity is held to a high standard of honesty and full disclosure and must not obtain a personal benefit at the expense of the client. In the case of the Billingses, FINRA found that Merrill Lynch was liable for breach of fiduciary duty and was ordered to pay compensatory damages.
The Billingses were never given any research on Fannie Mae despite their repeated requests. This prevented them from learning that Merrill Lynch had taken recent action, including recent analysts' reports, which reflected its negative view of Fannie Mae. Contrary to Mr. Pure's representations, it was Fannie Mae agency bonds and not the preferred shares that were back by the US government. The distinction was either not understood by Mr. Pure, or it was completely ignored by him in his sale of Fannie Mae shares to the Billingses.
Have you suffered losses as a result of broker misconduct? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

FINRA FINES MERRILL LYNCH $2.8 MILLION FOR OVERCHARGING CUSTOMERS

The Financial Industry Regulatory Authority (FINRA) has fined Merrill Lynch $2.8 million for overcharging nearly 95,000 customers with fees totaling more than $32 million. The overcharges occurred from April 2003 to December 2011. The fine also included failing to provide timely trade confirmations ("Merrill Lynch Fined for Overcharging Customers," Wall Street Journal).

"Investors must be able to trust that the fees charged by their securities firm are, in fact, correct," Brad Bennett, the regulator's chief of enforcement, was quoted as saying, adding: "When this is not the case, investor confidence is threatened."

Merrill Lynch's failure to send customers trade confirmations involved more than 10.6 million trades in over 230,000 customer accounts from July 2006 to November 2010. Merrill Lynch also failed to deliver proxy and voting materials, margin risk disclosure statements and business continuity plans.

Merrill Lynch blamed improper coding of accounts for the problems, according to the article. Merrill Lynch is a division of Bank of America.

In keeping with its much-criticized practice, FINRA allowed Merrill Lynch to buy its peace without admitting to any facts.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.