Tuesday, 27 January 2015
Last updated 14 hours ago
Jan 27 2011 | 11:37am ET
Merrill Lynch has settled charges that its equity proprietary trading unit front-ran clients.
The firm, which has since been acquired by Bank of America, will pay $10 million to make the Securities and Exchange Commission allegations go away. Merrill did not admit or deny wrongdoing.
According to the SEC, Merrill's since-closed equity strategy desk received word of large customer orders before they were placed, allowing it make its own orders first. The regulator also accused Merrill of charging institutional and high-net worth investors hidden fees for "riskless principal trades."
In one case, a Merrill market-maker, using instant messager, gave the prop. trading desk word that an institutional client had placed an order to sell 40,000 shares of a pharmaceutical company.
BofA said the firm has since put in new policies to separate its proprietary trading teams from its sell-side teams.
Jan 23 2015 | 1:00pm ET
In our new section, FINtech Focus, we will profile one of these firms each week. While fintech is a broad category, we will be focusing on firms that specifically cater to the alternative investment industry. Read more…