Merrill Lynch Pays $10 Million to End SEC Claims It Misused Client Orders

Source article from Bloomberg

Bank of American Corp.’s Merrill Lynch unit agreed to pay $10 million to settle U.S. regulatory claims that it misused clients’ securities orders to make trades with the firm’s own money.

“The conduct here was clearly inappropriate,” Scott Friestad, the SEC attorney who oversaw its case, said in the statement.

This kind of situation really ticks me off, and is proof positive that "justice" is relative to the size of your bank account.
If you or I commit multi-billion dollar fraud, we would be doing hard time, but when they do it, it is described as "inappropriate" and they get a slap on the wrist fine.

The government pretends that it wants to correct the regulations that led to this financial breakdown, but when it comes down to a possible dissuasion, like sending some of these CEO's to jail, for some reason they don't follow through.

Hmm, could it be because Wall Street owns the White House and tells it what to do, not the other way around?

the Billmeister

The justice system is so wrong at times. I wonder how much money they made from this fraud? Being capitalists there is probably still money to be made with the practices, just give the courts a small cut and those who can do anything about it are happy. $10 Million sounds like loose change to a company like that.

With a name like Lynch, how can anything go wrong

Originally posted by kwakakev
The justice system is so wrong at times. I wonder how much money they made from this fraud? Being capitalists there is probably still money to be made with the practices, just give the courts a small cut and those who can do anything about it are happy. $10 Million sounds like loose change to a company like that.

It's worse than that in my eyes..

The guys that commited the fraud probably made millions and are inline for a hefty bonus while the poor shareholder gets to foot the bill for the fine..

Justice?? Is there such a thing on Wall Street.???

Originally posted by backinblack

Originally posted by kwakakev
The justice system is so wrong at times. I wonder how much money they made from this fraud? Being capitalists there is probably still money to be made with the practices, just give the courts a small cut and those who can do anything about it are happy. $10 Million sounds like loose change to a company like that.

It's worse than that in my eyes..

The guys that commited the fraud probably made millions and are inline for a hefty bonus while the poor shareholder gets to foot the bill for the fine..

Justice?? Is there such a thing on Wall Street.???

I agree... in fact, by definition, this is organized crime!

def. organized crime: a system or organization of people and groups engaged in criminal activities (Webster's New World College Dictionary Copyright © 2010)

Their business model is based on fraud, and they are not alone. Here is another quote from the sourced article:

“These kinds of practices were probably pretty widespread in the industry,” said Phillip Phan, professor at the Johns Hopkins Carey Business School in Baltimore. “Merrill probably won’t be punished overly by the market -- and I find it hard to imagine institutions were completely naïve about this.”

As for the fine, their

Sales and trading revenue hit a record $7 billion in the first quarter

source $10M is chump change to them.

In fact, they probably have a formula that calculates "risk of fine" percentage vs. potential profit margin and the person who came up with it probably got a hefty bonus!

the Billmeister