Maine’s Office of Securities Announces Settlement with Merrill Lynch to Resolve Claims of Violating State Regulations Regarding the Sales of Securities

More than $400,000 from Merrill Lynch to be Deposited into Maine General Fund

GARDINER, MAINE  — Maine’s chief securities regulator announced Wednesday that the State has entered into an agreement with Merrill Lynch, Pierce, Fenner & Smith Inc., a unit of Bank of America Corporation, to resolve claims that the brokerage allowed some of its associates to sell securities without being properly registered.

As a result, Merrill Lynch will pay more than $400,000 to the State of Maine, which will be deposited into the general fund.  Nationally, the company will be paying $26.5 million in agreements to settle unregistered selling claims.

A national investigation beginning in 2008 concluded that Merrill Lynch failed to adequately supervise its client associates, who act as sales assistants and administrative support personnel for Merrill Lynch’s financial advisors.  Client associates accept trade orders from clients, a practice that requires registration both in the client associate’s home state and in the client’s state.  The investigation found that Merrill Lynch’s supervisory system was not reasonably designed to ensure that its client associates complied with registration requirements.  Following the investigation and resulting actions, Merrill Lynch has instituted new supervisory controls over the registration of client associates, which regulators believe will provide added protection to Maine consumers.

“Firms must comply with registration requirements and they should closely examine how they conduct business,” Securities Administrator Judith Shaw said. “Investors should be able to have confidence that their financial professionals are in full compliance with the appropriate regulations.”

“Regulators in Maine and across the nation have a responsibility to ensure that the public is protected from companies and individuals who disregard or fail to follow securities’ laws,” Administrator Shaw commented.  “We take this responsibility very seriously and aggressively pursue potential violations.”

In making Wednesday’s announcement, Administrator Shaw reminded consumers to contact Maine’s Office of Securities regarding the registration and disciplinary record of individuals and companies offering investment opportunities.  “Check before you invest is always our best advice.”  More information about the Office and its resources is available online at

The Office of Securities oversees the securities industry in Maine.  It is part of Maine’s Department of Professional and Financial Regulation, which encourages sound ethical business practices through the regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine.  Consumers can learn more about the Department at


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