Securities Lawyers Blog
According to news sources, Thomas Buck (Buck) and his daughter Ann Buck, were recently terminated by Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill Lynch), now known as Bank of America, NA (Bank of America) under unusual circumstances. Buck’s team managed nearly $1.5 billion in investor assets at the time. Buck has been associated with Merrill Lynch since 1982 according to Financial Industry Regulatory Authority (FINRA) records and became one of the company’s largest producers.
According to news sources, Buck was terminated for allegedly making unauthorized trades in client accounts. Advisors are not allowed to engage in unauthorized trading. Such trading occurs when a broker sells securities without the prior authority from the investor. The broker must first discuss all trades with the investor before executing them under NYSE Rule 408(a) and FINRA Rules 2510(b). These rules explicitly prohibit brokers from making discretionary trades in a customers’ non-discretionary accounts. The SEC has also found that unauthorized trading to be fraudulent nature.
The termination occurred on March 6, 2015, and stunned the firm’s other employees because the termination appeared out of the blue and without explanation leading to rumors. One person was quoted in the news saying “There is a lot more out there. I think it’s a little bit of heavy-handedness on Merrill’s part. Tom was shocked.”