Merrill Lynch pays $40 Million Settlement Over Alleged Broker Churning
Charles E. Kenahan, a stockbroker with Merrill Lynch in Boston since 2007, was fired following allegations of churning. His client Robert Levine, co-founder of the former billion-dollar network equipment giant Cabletron Systems, accused the 34-year veteran broker of providing unsuitable investment recommendations and making excessive trades between February 2012 and December 2017.
FINRA Individual Settlement Largest In Over A Decade
The complaint, filed in March 2018, went to a final hearing in front of a FINRA arbitration panel, during which Merrill Lynch agreed to pay a settlement of $40 million dollars. According to Craig McCann, principal of the Securities Litigation and Consulting Group, this is the largest settlement involving an individual claimant in over a decade, with over 29,000 claimants during this time period.
Merrill Lynch Facing Additional Claim
Merrill Lynch is also facing a similar claim for yet another of Kenahan’s clients, this time for the sum of $42 million dollars according to his FINRA BrokerCheck report.
The pending arbitration case was filed with FINRA in February of 2018 by former New Hampshire governor and co-founder of Cabletron Systems, Craig Benson. According to CNBC, Benson alleges that Kenahan churned his portfolio as well during his time with Merrill Lynch. Benson and a spokesperson for Merrill Lynch declined a request to comment.
If Benson’s case reaches a similar settlement, Bank of America Merrill Lynch will be paying over $80 million as a result of Kenahan’s excessive trading practices and churning.
Speak with a Securities Fraud Attorney
Dimond Kaplan & Rothstein, P.A. has vast experience with cases related to securities fraud or stockbroker misconduct. If you are looking for a securities fraud attorney to review your rights and options, the securities fraud lawyers at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors across the United States who have lost money as a result of securities fraud or stockbroker misconduct. We will aggressively pursue claims to recover your losses or damages.