The Financial Industry Regulatory Authority (FINRA) fined both Wells Fargo and Merrill Lynch $2.15 million for the unsuitable recommendation and sale of mutual funds known as "floating-rate bank loan funds." Not only were Merrill Lynch and Wells Fargo ordered to pay a hefty fine, FINRA also ordered the two firms to pay over three million dollars back to some of the customers that were solicited to purchase the floating-rate bank funds.
According to FINRA, brokers from these companies and associate companies allegedly solicited clients with conservative risk tolerances to purchase the floating-rate bank loan funds. FINRA defined floating-rate bank loan funds as, "... mutual funds that generally invest in a portfolio of secured senior loans made to entities whose credit quality is rated below investment-grade. The funds are subject to significant credit risks and can also be illiquid."
If you believe you were improperly sold floating-rate bank loan funds or have been victimized by securities fraud, fraudulent malpractice, or theft by a FINRA registered broker, please call the securities attorneys of The Costello Law Group at (877) 418-0003 for a free consultation.
For more information on FINRA's discipline of Merrill Lynch and Wells Fargo, please visit: http://www.finra.org/Newsroom/NewsReleases/2013/P269883