Merrill Lynch will have to resolve nearly $ 3.7 million compensation and other costs after arbitrators have chosen the side of the asset management company after a private equity complaint.
Two customers, Qun He and Haihui Zhang, filed a complaint at the end of 2023 against Merrill, Bank of America’s Wealth Management Division, which claimed that the company has violated the securities laws, industrial standards and its fiduciary duty.
The complainants also claimed that the company acted with negligence and negligence and violated his contract with regard to various non -specific effects. Merrill Lynch denied the allegations.
The Regulatory Authority (Finra) of the American Financial Industry (Finra) made an independent arbitration forum available, and a public panel of arbitrators decided that Merrill Lynch would have to pay $ 2.73 million in compensatory damage, $ 2.002 in costs and $ 954.634 in lawyer’s fees.
Michael Bixby, a lawyer in Florida who represented the two customers, says advisor hub that a broker has recommended investments in Illiquide’s own feeder funds sold by Merrill. Bixby says that the feeder funds have pooled capital in private equity investments under the supervision of institutional investors such as Apollo Global Management, KKR and Blackstone.
The lawyer says that the recommended funds were advertised as a potential annual return of 15% to 20%, but ended in the annual return of approximately 3% after deducting private equity costs and administrative costs of Merrill.
“We are happy with the result and we think it reflects the decision of the arbitrator that Merrill was responsible for misconduct and held them responsible.”
Follow us on X, Facebook and Telegram
Don’t miss a beat – Subscribe to get e -mail notifications directly to your inbox
Check price promotion
Surf the Daily Hodl -Mix
Generated image: midjourney