Bank of America Corp (NYSE: BAC) to Pay $2.5 Million to Settle Merrill Lynch Claims

Bank of America Corp (NYSE: BAC) will pay more than $2.5 million to settle claims from the Financial Industry Regulatory Authority (FINRA) that accused Merrill Lynch of failing to offer customers required discounts unit investment trusts purchases, a type of pooled asset.

Merrill Lynch, owned by Bank of America, did not have appropriate procedures to ensure that clients received the appropriate discounts, said FINRA, in a statement on Thursday. As a result, Bank of America Corp (NYSE: BAC) will pay a $500,000 fine and return more than $2 million back to cutostmers.

“It was critical for the firm to ensure that its brokers were diligent in providing sales-charge discounts,” said James Shorris, Washington-based FINRA’s enforcement chief, said in the statement. “This failure resulted in increased investment costs to Merrill’s customers.”

Unit investment trusts are investment portfolios which are made up of securities that terminate on a specific date. Brokers offer discounts on assets based on how many unit investors purchase or when they use proceeds from one terminated unit to purchase another one.

Merrill Lynch was accused of offering insufficient guidance for brokers to determine whether or not the customers qualified for the discounts between October 2006 and June 2008.

Bank of America essentially pled “no contest” and agreed to settle with FINRA without admitting or denying the allegations.

“We are pleased to resolve this matter,” said William Halldin, a spokesman for Charlotte, North Carolina-based Bank of America. “We are working to apply the appropriate discounts to all affected clients as quickly as possible.”