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Merrill to Pay $15.7 Million for Duping Mortgage Bond Buyers

Matt Robinson
Merrill to Pay $15.7 Million for Duping Mortgage Bond Buyers

Bank of America Corp.’s Merrill Lynch unit will pay $15.7 million to settle a U.S. regulator’s allegations that it failed to properly supervise traders who persuaded clients to overpay for mortgage bonds by misleading them about how much the firm paid for the securities. Merrill agreed to pay a fine of about $5.2 million, and to pay disgorgement and interest of more than $10.5 million, the SEC said. “Lying to customers about the acquisition price can deprive investors of important information,” said Daniel Michael, head of the SEC Enforcement Division’s complex financial instruments unit.