FINRA Bars Broker For Mishandling Client Funds

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FINRA Bars Broker For Mishandling Client Funds

Last week, former Merrill Lynch broker Kenneth Daley submitted a Letter of Acceptance, Waiver and Consent in which he accepted a permanent bar from acting as a broker or otherwise associating with firms that sell securities to the public. FINRA found that he had been mishandling client funds.

On June 16, 2016, Merrill Lynch filed a Uniform Termination Notices for Securities Industry Registration stating that his registrations had been terminated as of that date. Merrill Lynch also disclosed that at the time of his termination Daley was under internal review “for improperly receiving money from a client via checks written from an outside account.”

From 2007 to 2012, Daley was the broker of record for a husband and wife. After the husband died in late 2012, the widow became the sole point of contact on the account held at Merrill Lynch with Daley. The widow, an unsophisticated investor who had not held a job in nearly twenty years, also opened two more accounts with Daley.

In July 2014, the widow contacted Daley about giving him money to allow him to benefit by sharing in the profits of her Merrill Lynch account. On that day, she wrote Daley a check for $2,500 drawn from her Merrill Lynch cash management account. He immediately contacted the widow because he was afraid the firm would discover the deposit, which he knew was prohibited. To hide the deposit from the firm, Daley gave the widow his personal banking account details for an account he held at another financial institution, telling her that she could directly deposit funds related to purported profits in her Merrill Lynch account to his personal checking account. Between July and November 2014, the widow gave Daley $29,000, all of which Daley used for personal expenses. According to FINRA, Daley knew the whole time that he was not allowed to accept these payments.

According to FINRA’s BrokerCheck, Daley was first registered in 1994 with Charles Schwab & Co., Inc.. Between then and registering with Merrill Lynch in 2007, Daley spent time registered with Essex National Securities, Inc.; Chase Investment Services Corp.; Prudential Securities Incorporated; and Wachovia Securities, LLC.

If you or someone you know has lost money as a result of an investment, Ponzi scheme or a broker mishandling client funds, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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