A broker-dealer agreed to pay approximately $15 million to settle SEC charges of failing to supervise residential mortgage-backed securities ("RMBS") traders and salespersons.
According to the Order, employees of the broker-dealer Merrill Lynch, Pierce, Fenner & Smith Inc. ("Merrill Lynch") (i) misled their customers into overpaying for RMBS and (ii) profited from undisclosed commissions. Although Merrill Lynch had the policies and supervisory means in place to manage this, the SEC alleged that it failed to implement its procedures appropriately.
Merrill Lynch will pay civil penalties of approximately $5.2 million and repay approximately $10 million to its customers.
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