A settlement has been reached that will result in penalties against a former Merrill Lynch broker for unauthorized trading, according to AdvisorHub.
William “Bill” W. King was fined $5,000 and suspended for 30 days by the Financial Industry Regulatory Authority for trading in client accounts without proper authorization between Jan. 6, 2021, and Jan. 5, 2023.
According to a letter of acceptance, waiver and consent, King exercised discretion when placing 204 trades in six brokerage accounts held by four Merrill Lynch customers, three of whom were seniors. Although King discussed investment strategy with the customers, they had not provided prior written authorization for him to exercise discretion. In addition, Merrill Lynch did not accept the accounts as discretionary.
FINRA said Merrill Lynch’s written supervisory procedures prohibited exercising discretion in customer accounts without written authorization from the customer and prior approval from the firm. The authority added that King inaccurately attested in two compliance questionnaires that he had not exercised discretionary trading authority in customer accounts.
King was found to be in violation of FINRA Rule 3260(b). which prohibits a registered representative from exercising discretionary power in a customer’s account without prior written authorization from the customer and written acceptance from the member, and Rule 2010, which requires associated persons to observe high standards of commercial honor and just and equitable principles of trade in the conduct of their business. He did not admit or deny the allegations but accepted and consented to FINRA’s findings.
King spent 37 years with Merrill Lynch until resigning in 2023 while under review over potential unsuitable and unauthorized trades. Although he is no longer associated with a FINRA member firm, FINRA retains
jurisdiction over him pursuant to Article V, Section 4 of FINRA’s By-Laws.
Denis Patrick Kelleher of Rich, Intelisano & Katz in New York, who represented King in the FINRA settlement, did not respond to a request for comment. A Merrill spokesperson declined to comment. King did not return a request for comment sent through social media.
AdvisorHub reports that since 2022, King has been the subject of almost two dozen customer complaints. Merrill denied 10 claims and paid around $2.1 million of the $4.75 million in damages requested in 12 others. Most of the complaints involved claims of an unsuitable or unauthorized options trading strategy.
Lewitas Hyman routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. If you think your financial professional or firm engaged in misconduct that caused investment losses, contact the Chicago investor fraud attorneys of Lewitas Hyman to schedule a free consultation by calling (888) 655 6002 or through our online contact form.
