Skip to main content

FM
Former Member

Infamous for fraud, misusing clients’ cash, overcharging customers, fined millions for lying Merrill Lynch in talks with Govt. to manage oil money

Dec 16, 2018 News, By Kiana Wilburg, Kaieteur News, https://www.kaieteurnewsonline...to-manage-oil-money/

By Kiana Wilburg

Before Guyana could even pass a law to establish its Natural Resource Fund (NRF), one major corporation, Merrill Lynch, has already expressed its interest to the government, to potentially help manage the nation’s oil wealth.

But this very company that is courting local officials has been at the heart of several bribery investigations and has been fined billions of dollars for fraud, misusing customer’s cash and exposing its clients to great financial risk.

MISUSING CUSTOMER CASH
In June 2016, the Securities and Exchange Commission (SEC) announced that Merrill Lynch agreed to pay US$415 million and admit wrongdoing to settle charges that it misused customer cash to generate profits for the firm and failed to safeguard customer securities from the claims of its creditors.

In fact, an investigation found that Merrill Lynch violated the SEC’s Customer Protection Rule by misusing customer cash that rightfully should have been deposited in a reserve account. The probe revealed that Merrill Lynch engaged in complex trades that lacked economic substance and artificially reduced the required deposit of customer cash in the reserve account.

The maneuver freed up billions of dollars per week from 2009 to 2012 that Merrill Lynch used to finance its own trading activities. Had Merrill Lynch failed in the midst of these trades, the firm’s customers would have been exposed to a massive shortfall in the reserve account.

Merrill Lynch further violated the Customer Protection Rule by failing to adhere to requirements that fully-paid for customer securities be held in lien-free accounts and shielded from claims by third parties should a firm collapse. Had Merrill Lynch collapsed at any point, customers would have been exposed to significant risk and uncertainty of getting back their own securities.


“The rules concerning the safety of customer cash and securities are fundamental protections for investors and impose lines that simply can never be crossed,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement.

“Merrill Lynch violated these rules, including during the heart of the financial crisis, and the significant relief imposed reflects the severity of its failures.” (https://www.sec.gov/news/pressrelease/2016-128.html)

FINED US$42 MILLION FOR FRAUD
Last March, Merrill Lynch and its parent company, Bank of America, agreed to pay a record US$42 million fine to the State of New York for fraudulent activity related to its electronic trading services.

New York Attorney General Eric Schneiderman announced that an investigation of the Bank’s electronic trading services revealed a fraudulent “masking” scheme, designed to mislead clients about the entity responsible for executing in-house orders, the state said.

Though the Bank told its customers it was executing trade orders themselves, they were in reality routing them to electronic liquidity providers, including Citadel, Two Sigma and Knight. The bank used masking codes to make the trades.

“Bank of America-Merrill Lynch went to astonishing lengths to defraud its own institutional clients about who was seeing and filling their orders, who was trading in its dark pool, and the capabilities of its electronic trading services,” Schneiderman said in a statement.

The investigation showed that Bank of America and Lynch began the masking scheme as early as 2008 and that at least 16 million client orders were affected.

In addition to masking efforts, including the production of false transaction reports, investigators with the attorney general’s office in New York uncovered “other inaccurate representations to investors about the Bank’s electronic trading services” — all part of a broader effort to make the bank’s “electronic trading services look more sophisticated and safer than they really were.”

Officials with Bank of America-Merrill Lynch claim they began to address transparency problems related to their electronic trading services several years ago.

“The settlement primarily relates to conduct that occurred as long as 10 years ago,” the Bank told CNBC in an email. “At all times we met our obligation to deliver the best prices to clients. About five years ago, we addressed the issues concerning communicating to clients about where their trades were executed.” (https://www.upi.com/Bank-of-Am...fraud/7851521905381/)

SEC INVESTIGATES SWF DEALS
The Securities and Exchange Commission in 2011also launched an investigation to examine whether American financial firms violated the Foreign Corrupt Practices Act in their efforts to secure investments from foreign governments’ investment funds.

The agency sent letters to several firms asking them to preserve documents, though it is only in the early stages of its inquiry.

At the heart of the inquiry were the huge investments made by sovereign wealth funds in American financial firms in recent years.

Citigroup, Morgan Stanley and Merrill Lynch all sought capital injections from these government investment funds, raising billions of dollars in capital to shore up their balance sheets. (https://dealbook.nytimes.com/2...ith-sovereign-funds/)

ANOTHER FRAUD CASE
Last June, the Securities and Exchange Commission announced that it will be fining Merrill Lynch, US$5.2 million. The fine stems from deals involving residential mortgage-backed securities (RMBS) and the broker-deal will also have to pay back $10.5 million to customers.

Over the course of its investigation, the SEC found that Merrill Lynch had lied to its customers regarding the pricing of RMBS. Traders and salespeople working for the firm were able to convince customers to overpay for the securities by lying about how much they had paid for them.

On top of this, the same traders and salespeople massively overcharged for commissions. The SEC noted that, in some cases, they received double what they should have.

Merrill Lynch will be charged as these traders and salespeople violated antifraud securities laws. The SEC found that the company did not fulfill its supervisory duties and was therefore unable to prevent the lawbreaking from occurring.

The company did not admit or deny any of the investigation’s findings. Instead, it agreed to pay a $5.2 million fine to the SEC and pay back $10.5 million to the customers involved in the fraudulent transactions. (https://www.financemagnates.co...on-securities-fraud/)

Replies sorted oldest to newest

Barbarians at the gate.  I am actually surprised and disappointed to read this.  I have done business with Merrill Lynch both for my company and personally and found them to be very efficient and professional.  SEC records don’t lie though.

Bibi Haniffa
Last edited by Bibi Haniffa
Bibi Haniffa posted:

Barbarians at the gate.  I am actually surprised and disappointed to read this.  I have done business with Merrill Lynch both for my company and personally and found them to be very efficient and professional.  SEC records don’t lie though.

The author of this article tells half truths you are only too willing to believe because you are a Rat Man supporter. Truth be told, all the wall street banks have had charges and paid fines including creme de la creme Goldman Sachs.

Alyuh gat karna office and suh on close to Jamie Dimon. How come alyuh doan know dat JP Morgan Chase pay 13 billion USD in fines, eh? Or alyuh just like talk for talk sake?

If the writer had an ounce of credibility they would state that it's not just Merrill Lynch. ANY wall street bank is just as tarnished. Suh who yuh want set up de sovereign fund? Baseman?

FM
Nehru posted:

I love dummy logic, all Badee ah thief so why not Merrill

what logic you got stink mouth? ALL the wall street banks gat de same problem - teefing. Matter of fact the Euro ones do too. Tell we who YOU gon choose nah? It not as easy as choosing which antiman youtube video yuh gon post and den cry over it. Idiot!

FM
Ray posted:

stupid article...does not even address options if not Merrill...of course that would expose their idiocy

So you also like the dumb Guana thinks no company is honest?? Am I right?

Nehru
Ray posted:

stupid article...does not even address options if not Merrill...of course that would expose their idiocy

...hard fuh explain to yuh padna who tink dis is like opening he $10 checking account in richmond hill and collecting he toaster fuh warm up bake! Tell he dis is not about "honest company". Fool doesn't know anything about banking or finance. UBS paid $3 billion euros.

For this idiot writer to criticize the GOG for TALKING to Merrill when all the other banks have the same or worse reputation is BS! The ones who may not have a reputation issue do not necessarily have the capabilities to manage a SWF.

FM
Iguana posted:
Ray posted:

stupid article...does not even address options if not Merrill...of course that would expose their idiocy

...hard fuh explain to yuh padna who tink dis is like opening he $10 checking account in richmond hill and collecting he toaster fuh warm up bake! Tell he dis is not about "honest company". Fool doesn't know anything about banking or finance. UBS paid $3 billion euros.

For this idiot writer to criticize the GOG for TALKING to Merrill when all the other banks have the same or worse reputation is BS! The ones who may not have a reputation issue do not necessarily have the capabilities to manage a SWF.

Why no consider TD bank? They don't have the same baggage.

FM
Drugb posted:
Iguana posted:
Ray posted:

stupid article...does not even address options if not Merrill...of course that would expose their idiocy

...hard fuh explain to yuh padna who tink dis is like opening he $10 checking account in richmond hill and collecting he toaster fuh warm up bake! Tell he dis is not about "honest company". Fool doesn't know anything about banking or finance. UBS paid $3 billion euros.

For this idiot writer to criticize the GOG for TALKING to Merrill when all the other banks have the same or worse reputation is BS! The ones who may not have a reputation issue do not necessarily have the capabilities to manage a SWF.

Why no consider TD bank? They don't have the same baggage.

Yuh mek de layup, ah gon leff it fuh baseman or mars mek de slam dunk. Ah had meh dose of talking wid fools fuh de day.

FM
Iguana posted:
Drugb posted:
Iguana posted:
Ray posted:

stupid article...does not even address options if not Merrill...of course that would expose their idiocy

...hard fuh explain to yuh padna who tink dis is like opening he $10 checking account in richmond hill and collecting he toaster fuh warm up bake! Tell he dis is not about "honest company". Fool doesn't know anything about banking or finance. UBS paid $3 billion euros.

For this idiot writer to criticize the GOG for TALKING to Merrill when all the other banks have the same or worse reputation is BS! The ones who may not have a reputation issue do not necessarily have the capabilities to manage a SWF.

Why no consider TD bank? They don't have the same baggage.

Yuh mek de layup, ah gon leff it fuh baseman or mars mek de slam dunk. Ah had meh dose of talking wid fools fuh de day.

Yes a weak mind will seek help from others, no shame in that.

FM
Iguana posted:
Bibi Haniffa posted:

Barbarians at the gate.  I am actually surprised and disappointed to read this.  I have done business with Merrill Lynch both for my company and personally and found them to be very efficient and professional.  SEC records don’t lie though.

The author of this article tells half truths you are only too willing to believe because you are a Rat Man supporter. Truth be told, all the wall street banks have had charges and paid fines including creme de la creme Goldman Sachs.

Alyuh gat karna office and suh on close to Jamie Dimon. How come alyuh doan know dat JP Morgan Chase pay 13 billion USD in fines, eh? Or alyuh just like talk for talk sake?

If the writer had an ounce of credibility they would state that it's not just Merrill Lynch. ANY wall street bank is just as tarnished. Suh who yuh want set up de sovereign fund? Baseman?

I’m actually skeptical about the WS firms.  When their high bonuses are in peril, they leverage up and take on risk and play Russian roulette with other peoples money.

If I was making any decision, I would spread the risk between a US firm and a European.  Both have different governance rules and oversight for managing risk.  

For the US, maybe BlackRock?  They manage the Saudi oil funds.  For Europe, seek advice from the Danes or Norwegians or Swiss!

Anyone comes with their risk, so spread it.  There is no risk free investing.  Some years you do better than others.  Just plan to live to fight another day.

FM
Baseman posted:

For the US, maybe BlackRock?  They manage the Saudi oil funds.  For Europe, seek advice from the Danes or Norwegians or Swiss!

Anyone comes with their risk, so spread it.  There is no risk free investing.  Some years you do better than others.  Just plan to live to fight another day.

We know risk is part of investing. The writer of the article is taking shots at Merrill's reputation. Ms. Haniffa is jumping up and down in she saree screaming about "barbarians at the gate" with Merrill, when the fact is ALL these banks are tainted. Even Jamie Dimon's JPM and de karna office.

The Swiss (UBS) were fined $3 billion euros. The Norweigans have a well run oil fund. The problem with using different banks is over exposure to the same asset class, or in cases, even the same asset.

FM
Iguana posted:
Baseman posted:

For the US, maybe BlackRock?  They manage the Saudi oil funds.  For Europe, seek advice from the Danes or Norwegians or Swiss!

Anyone comes with their risk, so spread it.  There is no risk free investing.  Some years you do better than others.  Just plan to live to fight another day.

We know risk is part of investing. The writer of the article is taking shots at Merrill's reputation. Ms. Haniffa is jumping up and down in she saree screaming about "barbarians at the gate" with Merrill, when the fact is ALL these banks are tainted. Even Jamie Dimon's JPM and de karna office.

The Swiss (UBS) were fined $3 billion euros. The Norweigans have a well run oil fund. The problem with using different banks is over exposure to the same asset class, or in cases, even the same asset.

Nah mek worries bai.  Peokle gafuh vent!  Duh gyaal is a tycoon deh.  Suh you stay in yuh lane!!

As I said, I would look at a US and a European partner.  I’m skeptical with those trading houses on WS.  Dem rass gatt big big personal bonus to earn.  Dem guh do wuh dem gah fuh do guh get dem payout.

There are countries like the Saudis who have decades dealing with investment outfits.  I’m sure they can offer lots of insights!

FM
Iguana posted:
Bibi Haniffa posted:

Barbarians at the gate.  I am actually surprised and disappointed to read this.  I have done business with Merrill Lynch both for my company and personally and found them to be very efficient and professional.  SEC records don’t lie though.

The author of this article tells half truths you are only too willing to believe because you are a Rat Man supporter. Truth be told, all the wall street banks have had charges and paid fines including creme de la creme Goldman Sachs.

Alyuh gat karna office and suh on close to Jamie Dimon. How come alyuh doan know dat JP Morgan Chase pay 13 billion USD in fines, eh? Or alyuh just like talk for talk sake?

If the writer had an ounce of credibility they would state that it's not just Merrill Lynch. ANY wall street bank is just as tarnished. Suh who yuh want set up de sovereign fund? Baseman?

The government should not be engaging Meryl Lynch or any of the traditional  wall street crooks to manage our resources. These companies have done nothing but ruin economies around the globe. 

FM
Ray posted:

SO...who should be managing the potential funds?

There are lots of funds managers across the globe with better track records. Not because we know these names we should immediately gravitate to them. Further, who stops us from managing our own and picking and choosing what gets into the portfolio? These white boys do not do what they do from any superior wisdom.  They do not get rich from their success at managing stocks. Were t hat the case they would all be gone. They are successful because they charge to trade other  people's money. They get paid in the buying and selling of it. One company sole Libya's sovereign fund stocks from 4 billion dollars to zero! That is a fact jack!

FM
D2 posted:
Ray posted:

SO...who should be managing the potential funds?

There are lots of funds managers across the globe with better track records. Not because we know these names we should immediately gravitate to them. Further, who stops us from managing our own and picking and choosing what gets into the portfolio? These white boys do not do what they do from any superior wisdom.  They do not get rich from their success at managing stocks. Were t hat the case they would all be gone. They are successful because they charge to trade other  people's money. They get paid in the buying and selling of it. One company sole Libya's sovereign fund stocks from 4 billion dollars to zero! That is a fact jack!

Hey, a while back abie carna affice Wall Street tycoon seh burnham son in law was a top notch successful fund manager in the UK, me thinks we should gi he based on da lady assessment.  

But den again, duh lady did seh ML was also top notch etc etc but dint know dem gatt fined and sanctioned by the SEC for FRAUD!!!

Suh leh me see.  Me tink meh guh ask meh lil son weh Guyana should invest them aile money!

FM
Baseman posted:
D2 posted:
Ray posted:

SO...who should be managing the potential funds?

There are lots of funds managers across the globe with better track records. Not because we know these names we should immediately gravitate to them. Further, who stops us from managing our own and picking and choosing what gets into the portfolio? These white boys do not do what they do from any superior wisdom.  They do not get rich from their success at managing stocks. Were t hat the case they would all be gone. They are successful because they charge to trade other  people's money. They get paid in the buying and selling of it. One company sole Libya's sovereign fund stocks from 4 billion dollars to zero! That is a fact jack!

Hey, a while back abie carna affice Wall Street tycoon seh burnham son in law was a top notch successful fund manager in the UK, me thinks we should gi he based on da lady assessment.  

But den again, duh lady did seh ML was also top notch etc etc but dint know dem gatt fined and sanctioned by the SEC for FRAUD!!!

Suh leh me see.  Me tink meh guh ask meh lil son weh Guyana should invest them aile money!

Hey, how about some ex Lehman bros and Enron execs to advise them? Might be cheaper and would get the same results. All dem tiefing.

FM
Bibi Haniffa posted:

Burnham son-in-law has moved up to bigger and better things. He is moonlighting as Guyana Ambassador to India since Ronald Gajraj was fired from that job.

Diss nah mek no sense.  Why wan successful top notch UK hedge fund manager guh leff such a lucrative thingy fuh become Guyana ambassador to India!  Not even US or EU!

Something nah sound rite deh!  Either Datt India jab pay high high six figure (USD) salary oder you was Jess bullshitting Datt you know he was a big hedge fund tycoon!!

Which one is it?

FM
skeldon_man posted:
Baseman posted:
D2 posted:
Ray posted:

SO...who should be managing the potential funds?

There are lots of funds managers across the globe with better track records. Not because we know these names we should immediately gravitate to them. Further, who stops us from managing our own and picking and choosing what gets into the portfolio? These white boys do not do what they do from any superior wisdom.  They do not get rich from their success at managing stocks. Were t hat the case they would all be gone. They are successful because they charge to trade other  people's money. They get paid in the buying and selling of it. One company sole Libya's sovereign fund stocks from 4 billion dollars to zero! That is a fact jack!

Hey, a while back abie carna affice Wall Street tycoon seh burnham son in law was a top notch successful fund manager in the UK, me thinks we should gi he based on da lady assessment.  

But den again, duh lady did seh ML was also top notch etc etc but dint know dem gatt fined and sanctioned by the SEC for FRAUD!!!

Suh leh me see.  Me tink meh guh ask meh lil son weh Guyana should invest them aile money!

Hey, how about some ex Lehman bros and Enron execs to advise them? Might be cheaper and would get the same results. All dem tiefing.

Me lil son is a better bet.  He guh invest in mo aquarium and exotic fish and mek money fuh guyanese. He guh beat Rambarran!

FM

Add Reply

×
×
×
×
×
Link copied to your clipboard.
×
×