{"id":84373,"date":"2023-04-04T02:43:37","date_gmt":"2023-04-04T06:43:37","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=84373"},"modified":"2023-04-04T02:43:37","modified_gmt":"2023-04-04T06:43:37","slug":"merrill-lynch-to-pay-9-5-million-for-failing-to-disclose-foreign-exchange-fees-to-clients","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/04\/2023\/merrill-lynch-to-pay-9-5-million-for-failing-to-disclose-foreign-exchange-fees-to-clients.html","title":{"rendered":"Merrill Lynch to Pay $9.5-Million for Failing to Disclose Foreign Exchange Fees to Clients"},"content":{"rendered":"\n<p>(HedgeCo.Net) The Securities and Exchange Commission has charged <strong>Merrill Lynch, Pierce, Fenner &amp; Smith<\/strong> Incorporated for charging advisory clients more than <strong>$4 million<\/strong> in undisclosed foreign exchange fees for transfers to or from their accounts. To settle the charges, Merrill Lynch has agreed to pay disgorgement, prejudgment interest, and a civil penalty totaling more than <strong>$9.5 million<\/strong> and has agreed to distribute funds to harmed clients.<\/p>\n\n\n\n<p>The SEC\u2019s order finds that, between May 2016 and July 2020, Merrill Lynch offered programs to advisory clients in which the clients paid Merrill a fee in exchange for a range of investment advisory services, including foreign currency exchanges. In the program\u2019s client agreements and brochures, Merrill Lynch disclosed that it charged a markup or markdown on foreign currency exchanges, but it did not disclose an additional fee it referred to as a production credit, which, in more than 80 percent of the transactions, was equal to or greater than the disclosed markup or markdown. Merrill Lynch paid a percentage of these production credits to its financial advisors and referred to this charge as a commission in internal documents. The SEC\u2019s order also finds that Merrill Lynch failed to adopt and implement policies and procedures reasonably designed to prevent its disclosures from being misleading about the fees it charged on foreign currency exchanges.<\/p>\n\n\n\n<p>\u201cInvestment advisers must ensure that they do not selectively disclose some fees but not others relating to a particular service,\u201d said Antonia M. Apps, Director of the SEC\u2019s New York Regional Office.&nbsp;\u201cWhile Merrill Lynch disclosed the markups or markdowns charged on foreign currency exchanges, thousands of clients were left in the dark as to an often larger fee charged on these transactions and were charged millions of dollars in undisclosed fees.\u201d<\/p>\n\n\n\n<p>Merrill Lynch consented to the entry of the SEC\u2019s order finding that it violated Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and related rules. Without admitting or denying the SEC\u2019s findings, Merrill Lynch agreed to a cease-and-desist order, a censure, and to pay disgorgement of approximately $4.1 million, prejudgment interest thereon of $760,000, and a civil penalty of $4.8 million. Merrill Lynch agreed to distribute funds to harmed advisory clients.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(HedgeCo.Net) The Securities and Exchange Commission has charged Merrill Lynch, Pierce, Fenner &amp; Smith Incorporated for charging advisory clients more than $4 million in undisclosed foreign exchange fees for transfers to or from their accounts. To settle the charges, Merrill [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048],"tags":[],"class_list":["post-84373","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/84373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=84373"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/84373\/revisions"}],"predecessor-version":[{"id":84374,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/84373\/revisions\/84374"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=84373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=84373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=84373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}