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Were You a Victim of Former Merrill Lynch, Pierce, Fenner & Smith Incorporated Financial Advisor Thomas Buck?

Posted on Wednesday, November 8th, 2017 at 4:03 pm    

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Erez Law is currently investigating former Merrill Lynch, Pierce, Fenner & Smith Incorporated financial advisor Thomas Buck (CRD# 1024868) regarding false representations and omissions to clients regarding fees and commissions charged in their accounts and unauthorized trades in client accounts for which he did not have discretionary trading authority.

Buck was registered with RBC Capital Markets, LLC in Indianapolis, Indiana from April to July 2015 and with Merrill Lynch, Pierce, Fenner & Smith Incorporated in Indianapolis, Indiana from 1981 to 2015, when he was terminated regarding, “Allegations including failing to discuss service level and pricing alternatives with a customer, providing inaccurate information to firm management during account reviews regarding this issue, mismarking bond cross trade order tickets as unsolicited, and providing information to a client during an active account review that did not correspond to the firm’s records.”

In October 2017, the Securities and Exchange Commission (SEC) filed a complaint alleging that Buck, “represented to certain customers with commission-based accounts that the total annual commissions they paid would not exceed certain limits, and then he traded in those accounts and generated commissions that exceeded the amounts he promised. Buck failed to inform the customers that their total annual commissions were exceeding the promised limits and falsely represented to several customers that their total annual commissions were within the promised limits.” The SEC complaint also alleges that Buck intentionally failed to inform customers that a fee-based option could be cheaper compared to the total annual commissions being paid based on trades executed in an account. It is also alleged that Buck exercised discretion in customer accounts without authorization. The SEC complaint alleges that Buck received more than $2.5 million in excessive commissions and fees from at least 50 retail customers during the course of his 3-year scheme.

In July 2015, Buck consented to the sanction and to the entry of findings that he willfully committed fraud. The findings stated that Buck failed to fully assess the suitability of the fee structure for certain clients, but decided to use commission-based accounts when he knew that it would have been less expensive for those clients to maintain fee-based accounts. Buck also misled clients about the potential advantages of using fee-based accounts in order to keep the clients in higher-cost commission-based accounts. Approximately 80 percent of the revenues generated by Buck, ranging from $6 to $10 million, came from commission-based activity; whereas approximately 70 percent of his member firm’s Indiana complex’s revenue was generated through fee-based accounts. The FINRA investigation also found that Buck made unauthorized trades and exercised discretion in certain customer accounts without prior written authorization from the customers or his firm.

Buck has been the subject of 36 customer complaints between 2006 and 2017, one of which was denied, according to his CRD report:

February 2016. “The Customer alleges unauthorized trading, excessive trading and misrepresentation and omission of material facts from January 2009 to March 2015.
Settlement Amount” The case was settled for $69,661.22.

February 2016. “The Customers allege unauthorized trading, excessive trading and misrepresentation and omission of material facts from January 2009 to March 2015.” The case was settled.

February 2016. “The Customer alleges unauthorized trading, excessive trading and misrepresentation and omission of material facts from January 2009 to March 2015.” The case was settled.

February 2016. “The Customers allege unauthorized trading, excessive trading and misrepresentation and omission of material facts from January 2009 to March 2015.” The case was settled for $395,338.78.

February 2016. “The Customer alleges unauthorized trading, excessive trading and misrepresentation and omission of material facts from January 2009 to March 2015.” The case was settled for $395,338.78.

January 2016. “The Customers allege misrepresentation and omission of material facts from January 2010 to March 2015.” The customer sought $950,000 in damages and the case was settled for $430,000.

January 2016. “The Customer, through her attorney, alleges misrepresentation and omission of material facts regarding fees and commissions and unsuitable investment recommendations from December 2011 to March 2015.” The customer sought $125,000 in damages and the case was settled for $56,953.

December 2015. “The Customer alleges excessive trading from January 2012 to March 2015.” The case was settled for $16,305.

November 2015. “The Customer alleges misrepresentation and omission of material facts and unsuitable investment recommendations from February 2000 to March 2015.” The customer sought $425,000 in damages and the case was settled for $135,000.

October 2015. “The Customer alleges misrepresentation from May 2011 to March 2015.” The case was settled for $39,000.

October 2015. “The Customers allege misrepresentation from May 2011 to March 2015.” The case was settled for $565,000.

August 2015. “Client alleges misrepresentation and omission of material facts from April 2013 to March 2015.” The case was settled for $31,103.

August 2015. “The Customer alleges misrepresentation regarding commissions from January 2012 to March 2015.” The case was settled for $15,444.

August 2015. “The customers allege unauthorized trading from July 2014 to March 2015.” The case was settled for $34,195.

August 2015. “Customer alleges failure to follow instructions from September 2014 to March 2015.” The case was settled for $105,000.

August 2015. “The customers allege unauthorized trading from August 2012 to December 2012.” The customer sought $114,787 in damages and the case was settled for $75,000.

July 2015. “The Customer alleges unauthorized trading in October 2014.” The case was settled for $60,000.

July 2015. “Client alleged excessive trading from December 2009 to March 2015.” The case was settled for $400,000.

July 2015. “The customer alleges misrepresentation regarding fees and commissions from January 2011 to March 2015.” The case was settled for $8,600.

July 2015. “The Customer alleged misrepresentation regarding commissions charged from January 2009 to March 2015.” The case was settled for $719,014.

June 2015. “The Customer alleges misrepresentation regarding commissions from January 2013 to March 2015.” The case was settled for $35,000.

June 2015. “The customer alleges unauthorized trading, misrepresentation and omission of material facts, excessive trading and unsuitable investment recommendations from August 2009 to March 2015.” The customer case is currently pending.

June 2015. “The customers allege unauthorized trading and misrepresentation from January 2010 to March 2015.” The case was settled for $600,000.

May 2015. “The Customer alleges misrepresentation regarding commissions from January 2012 to December 2014.” The case was settled for $5,191.

May 2015. “The Customer alleges misrepresentation regarding commissions from January 2012 to December 2014.” The case was settled for $30,291.

May 2015. “Client alleged unauthorized trading on February 3, 2015.” The case was settled for $60,000.

May 2015. “The customer alleges unauthorized trading from January 2012 to March 2015.” The case was settled for $300,000.

May 2015. “The customers allege misrepresentation, excessive trading and unsuitable investment recommendations from February 2009 to March 2015.” The case was settled for $275,000.

April 2015. “The customer, through her attorney in fact, alleges excessive trading and unsuitable investment recommendations from January 2006 to March 2015.” The customer sought $125,000 in damages and the case was settled for $140,000.

April 2015. “Client alleged unauthorized trading from July 2014 to March 2015.” The case was settled for $24,154.29.

April 2015. “The customer alleges misrepresentation from May 2011 to March 2015.” The case was settled for $49,500.

April 2015. “The customers allege unauthorized trading from January 2012 to March 2015.” The case was settled for $210,000.

March 2015. “The customer alleges unauthorized trading from January 2012 to March 2015.” The case was settled for $100,000.

March 2015. “Client alleged excessive trading from August 2010 to March 2015.” The case was settled for $300,000.

Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Merrill Lynch, Pierce, Fenner & Smith may be liable for investment or other losses suffered by Buck’s customers.

Erez Law represents investors in the United States for claims against former Merrill Lynch, Pierce, Fenner & Smith Incorporated financial advisor Thomas Buck, who is alleged to provide false representations and omissions to clients regarding fees and commissions charged in their accounts and unauthorized trades in client accounts for which he did not have discretionary trading authority. If you were a client of Merrill Lynch, Pierce, Fenner & Smith or another firm, and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.