Merrill Lynch has agreed to pay $7 million to settle FINRA charges that the brokerage firm failed to adequately supervise customers use of loan proceeds to buy risky Puerto Rico bonds. Merrill Lynch will pay a $6.25 million fine and pay $780,000 in restitution to 22 clients.
Billions of dollars of Puerto Rico bonds have seen their values placed under intense downward pressure as the Caribbean island’s economy has continued its years-long decline. Fears of massive bond defaults have caused the island’s bonds to suffer tremendously.
FINRA found that Merrill Lynch did not adequately train its brokers about certain loan programs and that Merrill Lynch lacked adequate supervisory systems and procedures regarding the unsuitable use of loan proceeds to buy Puerto Rico bonds. FINRA also found that some customers’ accounts were highly concentrated in Puerto Rico bonds and that some of those accounts were highly leveraged.
Have you lost money in purchasing Puerto Rico Bonds?
Dimond Kaplan & Rothstein, P.A. represents dozens of investors whose accounts were unsuitably over-concentrated in risky Puerto Rico bonds.
If you lost money in unsuitable investments or if your broker misrepresented the risks of certain investments, contact a DKR stockbroker negligence lawyer for a free consultation today to discuss your rights. You may have a FINRA claim to recover your losses.