This week the sun has set on the near quarter of a century career of Bank of America Merrill Lynch top private wealth manager Patrick Dwyer. The top earning Dwyer, who wore both the broker and adviser hats for the firm has departed in the wake of company concern about a $25,000 political contribution he made in a suspected attempt to pressure the Financial Investor Regulatory Authority (FINRA) to wipe out customer complaints on his record.
That record includes a claim where customers were trying to seek more than $7.2 million in damages. All but one of the complaints were closed or denied without being resolved as detailed by the Miami Herald. The campaign contribution went to Florida Chief Financial Officer Jimmy Patronis who is one of the Florida officials who oversees the state banking regulator. That paper said an arbitration panel agreed to remove the complaints, but FINRA itself balked.
Dwyer had seven customer complaints filed against him between 2001 and 2009. Two were denied, one was settled and the rest were closed without any action. Six of the complaints alleged he had made unsuitable investment recommendations. In the one dispute that was settled, the client received $111,000 in 2001 after complaining Dwyer didn’t delay the purchase of an investment as the investor instructed. As is customary, the firm disclosed the matter was settled to avoid the expense of litigation and that the complaint arose from a misunderstanding between Dwyer and the investor. Before leaving, Dwyer had run a 12-person unit that had close to $4 billion in assets under management and took in $10 million in revenue for the firm annually.
Unfortunately, Merrill Lynch has been hit with dozens of FINRA arbitration claims and regulatory actions for various lapses of supervision for its brokers over the years. For example, in 2017 the firm was fined $1.4 million by FINRA for “failing to establish a reasonable supervisory system and procedures to identify and evaluate extended settlement transactions, and for related rule violations.” In 2018 the firm was fined by Finra $300,000 for failing to supervise the actions of rogue broker Eva Weinberg, who had previously been employed with the firm. The firm earlier this summer paid a $40 million settlement to a customer of firm broker Charles E. Kenahan who alleged his broker churned his account and is facing a similar claim for $42 million from another customer who had the same broker.
Like most brokerage firms, Merrill Lynch has a binding arbitration clause in its new account applications with customers. This means for any legal dispute that may arise for churning, unsuitable investment recommendations, fraud or other similar allegations, the customer must file a claim in the FINRA arbitration forum instead of a lawsuit in court. Our Chicago based law firm has sued Merrill Lynch over 200 times and firm principal Andrew Stoltmann previously worked as a financial advisor at Merrill Lynch before attending law school. To learn about legal options against Merrill Lynch, please contact our law firm in Chicago at 312.332.4200.