NYSE Socks Merrill Lynch Unit With $10 Million Fine

The New York Stock Exchange has ordered Merrill Lynch Pierce Fenner & Smith to pay a $10 million fine for a failure to deliver prospectuses to customers in mutual fund transactions and other supervisory and operational lapses, according to an Aug. report from Dow Jones.

The report says that broker-dealer failed to deliver prospectuses from October 2002 to March 2004 in respect to 64,000 transactions in connection with sales of registered, open-ended mutual fund securities. The firm also failed to deliver prospectuses with respect to about 900 transactions in approximately 275 accounts in auction-rate preferred stocks between January 2004 and July 2004.

"The delivery problems we encountered were caused by coding problems that the firm discovered, corrected and subsequently reported to NYSE," said Mark Herr, a Merrill Lynch spokesman.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.