Merrill Lynch To Pay $9.5 Mln To Settle SEC Charges Related To Undisclosed Foreign Exchange Fees

(RTTNews) - Merrill Lynch has agreed to pay $9.5 million to settle charges that it charged advisory clients over $4 million in undisclosed foreign exchange fees.

The Securities and Exchange Commission has charged Merrill Lynch, Pierce, Fenner & Smith Inc. for charging advisory clients more than $4 million in undisclosed foreign exchange fees for transfers to or from their accounts.

To settle the charges, Merrill Lynch has agreed to pay disgorgement, prejudgment interest, and a civil penalty totaling more than $9.5 million and has agreed to distribute funds to harmed clients.

According to SEC, Merrill Lynch, between May 2016 and July 2020, offered programs to advisory clients in which the clients paid Merrill a fee in exchange for a range of investment advisory services, including foreign currency exchanges.

"Investment advisers must ensure that they do not selectively disclose some fees but not others relating to a particular service," said Antonia M. Apps, Director of the SEC's New York Regional Office. "While Merrill Lynch disclosed the markups or markdowns charged on foreign currency exchanges, thousands of clients were left in the dark as to an often larger fee charged on these transactions and were charged millions of dollars in undisclosed fees."