Merrill Lynch hit with record reporting fine
27 April 2015 London
Image: Shutterstock
The UK Financial Conduct Authority (FCA) has issued its highest ever penalty for transaction reporting failures, fining Merrill Lynch £13.29 million.
The FCA found that Merrill Lynch incorrectly reported more than 35 million transactions, and failed completely to report another 121,387 between November 2007 and November 2014.
Merrill Lynch failed to address the root causes of the failure, despite a poor history of transaction reporting compliance and substantial industry guidance from the FCA. It was issued a private warning in 2002 and a fine of £150,000 in 2006.
Because of the severity of the misconduct, the FCA used a penalty of £1.50 per line on incorrect or non-reported data, instead of the usual £1 per line, as the £1 penalty was not deemed high enough to be a credible deterrent.
The wealth manager agreed to settle at an early stage of the investigation and was therefore eligible for a 30 percent reduction in the fine. Without this, the penalty would have been just under £19 million.
Georgina Philippou, the FCA’s acting director of enforcement and market oversight, said: "Proper transaction reporting really matters. Merrill Lynch International has failed to get this right again – despite a private warning, a previous fine, and extensive FCA guidance and enforcement action in this area.”
“The size of the fine sends a clear message that we expect to be heard and understood across the industry.”
The FCA found that Merrill Lynch incorrectly reported more than 35 million transactions, and failed completely to report another 121,387 between November 2007 and November 2014.
Merrill Lynch failed to address the root causes of the failure, despite a poor history of transaction reporting compliance and substantial industry guidance from the FCA. It was issued a private warning in 2002 and a fine of £150,000 in 2006.
Because of the severity of the misconduct, the FCA used a penalty of £1.50 per line on incorrect or non-reported data, instead of the usual £1 per line, as the £1 penalty was not deemed high enough to be a credible deterrent.
The wealth manager agreed to settle at an early stage of the investigation and was therefore eligible for a 30 percent reduction in the fine. Without this, the penalty would have been just under £19 million.
Georgina Philippou, the FCA’s acting director of enforcement and market oversight, said: "Proper transaction reporting really matters. Merrill Lynch International has failed to get this right again – despite a private warning, a previous fine, and extensive FCA guidance and enforcement action in this area.”
“The size of the fine sends a clear message that we expect to be heard and understood across the industry.”
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