Sylvester Knox, Formerly of Merrill Lynch, Suspended by FINRA for Alleged Unauthorized Trading and Failing to Disclose Felony Indictment

Knox is accused of treating accounts as discretionary without customer authorization and falsely attesting that he had not been charged with a felony.

The Sonn Law Group is investigating allegations that Sylvester Knox committed misconduct. If you’ve suffered losses investing, Please contact us today for a free review of your case.

sylvester-knox-suspended Sylvester Knox (CRD#: 1625705) was registered as a broker with Merrill Lynch from 2000 until 2017. In January 2017, Knox was permitted to voluntarily resign from Merrill Lynch following allegations that he engaged in unauthorized transactions in clients accounts, making misrepresentations to clients, and conduct inconsistent with Firm policies related to client complaints and outside speaking engagements.

On August 6, 2020, Knox was suspended by FINRA after signing a Letter of Acceptance, Waiver & Consent. Knox consented to sanctions in the form of a $10,000 fine and a nine-month suspension. The findings alleged that Knox effected transactions in the accounts of customers of his member firm (Merrill Lynch) without the customers’ authorization or consent.

The findings also alleged that Knox exercised discretionary trading authority and effected transactions with a total principal value of approximately $2 million in the accounts of firm customers without having obtained prior written authorization from the customers or approval from the firm to treat the accounts as discretionary. FINRA alleged that Knox willfully failed to timely disclose a felony indictment via the filing of an amended Form U4. In addition, Knox falsely attested on firm compliance questionnaires that he had not been charged with a felony and on one compliance questionnaire that he did not use discretionary trading authority. Knox also allegedly made misstatements to the firm regarding whether the customers authorized transactions when responding to supervisory inquiries.

Knox’s suspension is set to begin on August 17, 2020.

Knox has 25 disclosures on his BrokerCheck report that occurred since 2016. Three customer disputes brought against him were denied.

May 2018 Customer Dispute

Status: Settled
Allegations: The Customer alleges unauthorized trading on January 22, 2013.
Settlement Amount: $5,000.00
Broker Comment: I did not receive a copy of this Complaint. The client has never expressed dissatisfaction with my services.

March 2018 Regulatory Judgment

Status: Final
Initiated By: Florida Office of Financial Regulation
Allegations: Making a material misstatement on the application for registration.
Resolution: Order
Sanctions: Denial
Broker Comment: On 3/30/2018, the Office of Financial Regulation issued a Notice of Intent to Deny the application of Sylvester Knox as an associated person of FSC Securities Corporation. Mr. Knox may request a hearing to consent this action filed by the Office. The request for hearing must be filed within twenty-one (21) days of receipt of the Notice of Intent to Deny Application for Registration.

January 2018 Regulatory Judgment

Status: Final
Initiated By: Michigan
Allegations: The Administrator intends to revoke, suspend, condition, or limit the securities agent registration of Sylvester Knox under section 412(2) of the Securities Act, MCL 451.2412(2), because he is subject to a cease and desist order by a state securities regulator, and because he has engaged in dishonest or unethical business practices in the securities industry within the previous 10 years, which support the revocation of his securities agent registration under the above cited provisions of the Michigan Uniform Securities Act (2002), 2008 PA 551, MCL 451.2101 et seq.
Resolution: Consent
Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
Amount: $1,500.00
Sanctions: Within fifteen calendar days after the date this Administrative Consent Order is entered, Respondent will withdraw his registration as a securities agent in Michigan.

January 2018 Regulatory Judgment

Status: Final
Initiated By: Michigan
Allegations: Respondent Sylvester Knox filed false or misleading information with the Bureau, in violation of section 505 of the Securities Act, MCL 451.2505, by submitting correspondence to the Bureau on or around April 14, 2017 and May 18, 2017 in which he denied knowledge of any internal review or investigation by his former employer, Merrill, Lynch, Pierce, Fenner, and Smith, Inc. Evidence gathered during the investigation shows that Respondent was aware of and actually cooperated with the internal investigation. The statements made in the April 14, 2017 and May 18, 2017 correspondence to the Bureau were false or misleading, contrary to section 505 of the Securities Act, MCL 451.2505.
Resolution: Consent
Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
Amount: $1,500.00
Sanctions: Within fifteen calendar days after the date this Administrative Consent Order is entered, Respondent will withdraw his registration as a securities agent in Michigan.

May 2017 Customer Dispute

Status: Settled
Allegations: The Customer alleges misrepresentation and omission of material facts from August 2012 to May 2017.
Settlement Amount: $300,000.00
Broker Comment: The (Puerto Rico) muni bonds in question were investment grade at the time purchased and were recommended by Merrill Lynch to offer to our clients.

November 2016 Customer Dispute

Status: Settled
Allegations: The Customer alleges unauthorized account activity and misrepresentation from August 2016 – September 2016.
Settlement Amount: $69,344.40

November 2016 Customer Dispute

Status: Settled
Allegations: The Customer alleges unauthorized account activity and misrepresentation from August 2016 – September 2016.
Settlement Amount: $105,947.26

November 2016 Customer Dispute

Status: Settled
Allegations: The Customer alleges unsuitable investment recommendations, misrepresentation and omission of material facts from 2008-2016.
Settlement Amount: $1,569,114.00
Broker Comment: I do not know this complain. I was not informed of any information of this allegation. As far as I know the client was very happy with my services.