The United States Financial Industry Regulatory Authority (Finra) has imposed a sanction of 11.65 million dollars (9.75 million euros) to a subsidiary of Bank of America for having charged excessive commissions to thousands of clients of one of your investment products, as reported by the regulator this Friday in a statement.
Specifically, the bank will have to return 8.4 million (7.03 million euros) to 3,000 customers for having charged them “excessive” charges for a product called ‘Unit Investment Trust’ (UIT). In addition, Finra has imposed a penalty of 3.25 million (2.72 million euros) for failing to “reasonably supervise” such products.
UITs are investment firms that offer investors shares (called units) in a fixed portfolio of securities in an initial public offering that ends on a specific date, usually within 15 or 24 months.
Between January 2011 and December 2015, Merrill Lynch, Pierce, Fenner & Smith, a Bank of America subsidiary, conducted transactions of these products worth $ 32 billion (26,794 million euros). Of that figure, 2,500 million (2,093 million euros) corresponded to ITU sales that were made more than 100 days before the expiration date.
A failure in the information system of this process of selling one ITU to invest in another, caused those 3,000 clients to pay 8.4 million dollars in charges that they should not have faced.