On June 28, 2021 the Financial Industry Regulatory Authority levied an $11.7M penalty against Merrill Lynch stemming from their investigation into early rollovers of Unit Investment Trusts and accepted settlement letters from 30 and 35-year Merrill veterans in Chattanooga, Tennessee, and Charlotte, North Carolina. Both the brokers agreed to three-month suspensions and $5,000 in fines for allegedly unsuitable UIT switch recommendations. This likely represents just a small fraction of the more than two and half billion worth of potentially improper UIT exchanges processed by Merrill between 2001 and 2015. Veach Law is investigating matters in both states. See the full Advisor Hub article HERE.
If you have been the victim of improper UIT exchanges in Tennessee or North Carolina, contact Tucker Veach by calling 828-398-8288 or by using the contact form anywhere on this site.
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Unit Investment Trusts (UITs) are long-term investments with fixed maturity dates (typically 15 to 24 months). Exchanges occur when brokers recommend selling a UIT early and rolling the proceeds into a new UIT.
Early UIT exchanges often trigger substantial new sales charges (often 2.95% or more) and creation fees. Regulators found that brokers frequently recommended early rollovers into similar trusts without a legitimate financial rationale, generating unnecessary fees at the investor’s expense.
Yes. FINRA ordered Merrill Lynch to pay over $11.6 million in fines and customer restitution due to widespread supervisory failures that allowed brokers to execute billions of dollars in premature UIT exchanges.
If your broker repeatedly recommended selling UIT positions months before their scheduled maturity date to buy new ones, you may have incurred excessive, unsuitable sales charges.
Yes. Investors can file individual FINRA arbitration claims against Merrill Lynch to seek compensation for unearned sales commissions, suitability violations, and supervisory misconduct.
