Merrill Lynch Fined $175k for Failing to Timely Report Complaints of Defrauding Adviser Who Escaped to LPL

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FINRA fined Banc of America Corp.'s Merrill Lynch for taking too long to report 1200 required filings to FINRA, including two customer complaints of misappropriation against financial adviser Greg Campbell; in the interim, Merrill Lynch terminated Campbell—categorizing his departure as "voluntary"—who subsequently joined an LPL Financial affiliate, where he continued to misappropriate funds from customers.

FINRA Case #2013037137602

According to FINRA, Campbell misappropriated $1.7 million from Merrill Lynch customers between May 2008 and October 2011 before leaving the firm for LPL, where he continued his misdeeds by misappropriating over $500,000 from LPL customers over the next year.

The findings state that several days before Campbell's last day at Merrill Lynch in October 2011, the firm received a complaint alleging that Campbell had stolen from and committed other unauthorized activities in a customer's IRA and personal brokerage accounts.

Investigators found that Merrill Lynch failed to report the written customer complaint to FINRA until October 26, 2012—exactly one year after receiving the first complaint. Upon receiving news of the original complaint, the LPL affiliate discharged Campbell.

Campbell since pleaded guilty to federal wire fraud and received a 38-month prison sentence for his crime—stealing clients' money with a credit line scheme and using it for personal reasons, including a mortgage, car loan and other expenses. Victims ranged from relatives to an elderly client with dementia. In one case, Campbell pretended to be a 70-year-old customer's grandson in order to gain illegitimate access to the client's money.

As illustrated above, the untimely reporting of complaints against a broker or adviser—in this case, a year's delay—can have devastating consequences for the investing public.

If you have invested with Merrill Lynch or LPL Financial's Greg Campbell or with another broker or financial adviser whose current or prior firm's failure to timely and accurately report a customer complaint or reason for termination has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for investigation and consultation.

News: Finra Fines Merrill Lynch Over Delay in Reporting Allegations Against Adviser (The Wall Street Journal)