June 25 (Reuters) – Financial institution of America Corp’s (BAC.N) Merrill Lynch unit can pay almost $11.7 million to resolve claims that it overcharged prospects who invested in unit funding trusts, a U.S. regulator stated on Friday.
The payout features a $3.25 million fantastic and $8.44 million of restitution, in line with the Monetary Trade Regulatory Authority. Merrill didn’t admit or deny wrongdoing in agreeing to settle.
A unit funding belief, or UIT, lets individuals spend money on a onetime public providing in a portfolio of securities, sometimes shares and bonds. Not like a mutual fund, a belief matures on a particular date, and pays traders the proceeds from securities it held.
In line with FINRA, Merrill didn’t detect that between 2011 and 2015 its monetary advisers offered $2.5 billion of their shoppers’ UITs greater than 100 days earlier than the maturity dates, and used some or all proceeds to purchase new UITs.
It stated the early rollovers could have induced greater than 3,000 prospects to incur gross sales fees they might have averted had they held their UITs to maturity. Many newly bought UITs used the identical methods because the UITs that had been offered, it added.
Financial institution of America spokesperson Alliccia Hernandez stated Merrill addressed FINRA’s considerations by enhancing its supervisory system.
Reporting by Jonathan Stempel in New York
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