Former Client of Merrill Lynch Wins FINRA Award Over $300,000

The client was awarded compensatory damages for $330,000 for Intel Corporation stock losses.

The Sonn Law Group is investigating allegations that Merrill Lynch advisors committed misconduct. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.

In October 2019, FINRA awarded a former customer of Merrill Lynch $330,000 in compensatory damages for investment losses sustained. The former customer allegedly worked with two financial advisors at Merrill Lynch. The former customer was allegedly advised that “a conservative investment strategy to generate income would be to write covered call options using his extensive Intel stockholdings.

The claimant made it clear to both financial advisors that he would only pursue this strategy if he could be assured that none of his Intel shares would end up being sold away. The advisor who was helping Claimant with his call option strategy in 2018 admitted that it was his understanding that he would receive advance notice of any potential assignment of Claimant’s shares which would allow time for the options to be bought back prior to any exercise.

Because this advisor knew Claimant wanted to make sure that his shares were not called away, he testified that he checked with someone at the Merrill Lynch options trading desk in order to confirm his understanding. On numerous occasions, Claimant was told by this advisor that he would get advance notice before any of his shares were assigned so that he could buy back the options before they were exercised.”

The findings included charges of Arizona securities fraud, misrepresentation and omissions, breach of fiduciary duty, breach of trust, breach of agency, negligent supervision, control-person liability, constructive fraud, and consumer fraud, all related to the exercise of a call-option using Intel stock.

The FINRA panel found that Merrill Lynch was only liable for negligent misrepresentation and negligence.

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Merrill Lynch may be liable for investment or other losses suffered by its customers.

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The Sonn Law Group is currently investigating allegations that brokers recommended unsuitable investments. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.