In the Media

In the News

Now & Then
ON WALL STREET
By Tony Chapelle
May 2, 2006

Back In 2001, Stanley O'Neal lauded Merrill Lynch's investor call centers for giving customers "the attention they deserve." But according to the NASD, they didn't. When the Merrill brokerage chief made that claim, the call centers were allegedly in the midst of a three-year period when brokers there were poorly supervised, mutual fund trades weren't monitored properly, and clients were sometimes steered into unsuitable and costly funds.

This past March, the NASD hit Merrill with a $5 million fine for alleged violations at the firm's two Financial Advisory Centers from 2001 to 2004. The call centers also have been prohibited from holding sales contests for three years after Merrill was found to have violated the NASD rule against giving noncash sales incentives.

"Clearly, we were not aware of the problems," says Merrill spokesman Bill Halldin, noting that 90% of Merrill's call center clients today say they're "highly satisfied" with their service.

Attorney Jacob Zamansky says the NASD action will make it possible for investors to file lawsuits for losses incurred and excessive fees charged by call center brokers. "It is likely that they could get restitution through arbitration cases against those brokers given the misconduct cited by the NASD," he says.

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