“On the fifth floor of Merrill Lynch & Co.’s headquarters at the World Financial Center in lower Manhattan, a small team of traders who bought and sold securities with the firm’s own money for two years were close enough to see the computer screens of traders taking orders from clients and overhear their phone calls.
The Securities and Exchange Commission said Tuesday that the proprietary-trading desk, which traded electronic messages with its nearby counterparts, was illegally spoon-fed information about what Merrill’s clients were doing, and then copied an unspecified number of trades between 2003 and 2005. Merrill also encouraged market-making traders to generate and share “trading ideas” with the proprietary-trading desk, according to the SEC.
Merrill, acquired by Bank of America Corp. in 2009, agreed to pay $10 million to settle the accusations, which also included charging institutional investors undisclosed trading fees. Merrill neither admitted nor denied wrongdoing. ”
So, Wall Street has a credibility problem with Main Street, huh? Wonder why…
Robert M. Bilkie, Jr., CFA