Merrill Lynch has been hit with a $1.25 million penalty by the Securities and Exchange Commission for failing to recognize red flags in the unregistered sales of securities on behalf of a China-based issuer. The regulator claims the firm sold nearly 3 million shares of Longtop Financial Technological Limited’s securities, generating $38 million in proceeds for the issuer. “Broker/dealers are important gatekeepers,” said Antonia Chion, associate director of the SEC’s Division of Enforcement. “A broker/dealer has a duty to conduct a reasonable inquiry and know its customers before effecting unregistered sales of securities.” The firm agreed to settle the charges and pay the penalty, along with more than $154,000 in disgorgement and prejudgment interest from commissions and fees earned on the improper sales.
The SEC released a statement Wednesday warning investors that some digital currency exchanges might be unlawful. “If a platform offers trading of digital assets that are securities and operates as an ‘exchange,’ as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration,” the statement said. But the regulator is concerned that some exchanges might appear to investors as SEC-registered (and therefore regulated) but haven’t been. The statement also included a list of questions investors should ask themselves before using the exchanges.
eMoney has created a new continuing education program. Developed by eMoney’s in-house team of 12 Cerified Financial Planners, the program is available to all eMoney clients in need for CE credits to apply toward their CFP designation. The online program will be offered via live, one-hour sessions on the third Thursday of each month. Each session is capped at 1,000 participants, with 900 already registered for the March session, which will be held at 2 p.m. on March 15. It will focus on tax reform and how it affects end-clients.