The Vermont Department of Financial Regulation has imposed a $140,000 penalty on Merrill Lynch Pierce Fenner & Smith Inc. and Lawrence Barber, a registered broker/dealer agent and investment adviser representative in the company's Burlington office.
The penalty stemmed from the action that the department has taken after investigating a complaint from a customer seeking reimbursement from Merrill Lynch for losses incurred because of Barber's actions. The penalty will be paid to the state.
The investigation found that Barber modified the client's account without permission, secured inappropriate access to the client's online account, failed to follow the client's express instructions and acted against Merrill Lynch's policies and procedures.
The investigation further revealed that Merrill Lynch failed to adequately supervise Barber to prevent and respond to actions that were against its internal policies.
The penalty consists of a combined administrative penalty of $98,000 that will go to the general fund, a $30,000 reimbursement to the department for investigation costs and $12,000 for the department's investor education and training fund. Merrill Lynch has also made full restitution to the client.