Merrill Lynch Allegedly Failed to Perform Gatekeeping Functions Regarding the Unregistered Sales of Securities on behalf of Chinese Issuer Longtop Financial Tech, Sold Nearly Three Million Longtop Shares Despite Red Flags
Merrill Lynch, Pierce, Fenner & Smith Inc. allegedly failed to to perform essential gatekeeping functions pertaining to the unregistered sales of securities on behalf of a China-based issuer and its affiliates, according to an SEC Order under review by investor right attorney Alan Rosca.
Attorney Rosca, of the RoscaLaw LLC firm, is investigating Merrill Lynch’s alleged gatekeeping failures.
Investors who believe they may have lost money in activity related to Merrill Lynch’s alleged gatekeeping failures are encouraged to contact attorney Alan Rosca with any useful information or for a free, no obligation discussion about their options.
Merrill Lynch allegedly sold almost three million shares of Longtop Financial Technological Limited’s securities into the market even though red flags purportedly showed that the sales could include allegedly unlawful unregistered distribution, the aforementioned Order notes.
In the end, said distribution allegedly produced nearly $38 million in proceeds for the overseas issuer and its purported affiliates, the Order reports.
Merrill Lynch Must Pay a Penalty of $1.25 Million and Over $154,000 in Disgorgement and Prejudgment Interest from Commissions and Fees Allegedly Earned on the Improper Sales
Merrill Lynch, in settlement, and without admitting or denying the SEC’s findings, allegedly agreed to be censured and consented to the order requiring it to cease and desist from committing or causing any future violations of the registration provisions of the Securities Act, according to the aforementioned Order under review by attorney Alan Rosca.
Merrill Lynch has also been ordered to pay a penalty of $1.25 million and more than $154,000 in disgorgement and prejudgment interest from commissions and fees earned on the alleged improper sales. Furthermore, the SEC has reportedly revoked the registration of Longtop’s securities, the Order notes.
Antonia Chion, Associate Director of the SEC’s Division of Enforcement, has made the following statement:
“Broker-dealers are important gatekeepers… A broker-dealer has a duty to conduct a reasonable inquiry and know its customers before effecting unregistered sales of securities.”
What is more, that Merrill Lynch also allegedly violated Sections of the Securities Act of 1933, the Order notes.
Securities Lawyer Investigating
The RoscaLaw firm represents investors who lose money as a result of investment-related fraud or misconduct and are currently investigating Merrill Lynch’s alleged gatekeeping failures. The firm takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions, and has helped recover tens of millions of dollars on behalf of investors.
Investors who believe they lost money as a result of Merrill Lynch’s alleged gatekeeping failures may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at email@example.com, or through the contact form on this webpage.