Billion-Dollar Advisor Barred From Industry

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A one-time billion-dollar producer is no longer in business.

Thomas J. Buck, an ex-Merrill Lynch advisor who once oversaw $1.2 billion in client assets, was permanently barred from the industry for allegedly overcharging and misleading clients, according to FINRA records.

Without admitting or denying the findings Buck consented to the sanctions against him. According to FINRA, Buck "willfully committed fraud" and in some instances his clients paid "substantially more in commissions than they would have paid in fee-based accounts."

Buck "not only 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 in some instances," according to the FINRA findings filed on Friday.

FINRA further notes that Buck's former practice at Merrill generated $6 million to more than $10 million in production, with at least 85% of that business "directly attributable to Buck's individual production." Approximately 80% of the revenues generated by Buck came from commission-based activity, compared to 70% which was fee-based at Merrill's Indiana Complex, according to FINRA. Buck also made unauthorized trades and exercised discretion in certain customer accounts without prior written authorization, FINRA says.


Buck was discharged from Merrill earlier this year after allegations that include "failing to discuss service level and pricing alternatives with a customer, providing inaccurate information to management during account reviews regarding the 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 firm records," according to FINRA.

Buck landed at RBC in April 2015. As of last week, Buck was no longer with the regional brokerage, according to complex director Burton P. Street. "Tom resigned… retired from the firm a week ago," Street told On Wall Street.

"We are greatly disappointed to learn of these actions by Tom Buck, who is no longer with the firm," RBC spokeswoman Nicole Garrison said in an email. "These actions are entirely inconsistent with the representations he made to us during the hiring process and stem from conduct that occurred while Mr. Buck was employed with another firm. They are in no way related to any activities during his time with RBC."

A woman answering the phone at Buck's former RBC office in Indianapolis said his daughter Ann, also employed at the practice and an Indianapolis Colts cheerleader, deferred all calls to RBC. According to Garrison, Ann will assume leadership of Buck & Associates.

Brian Hamburger, Buck's attorney earlier this year, said he was no longer working with the client. "Since we helped secure his position at RBC, I understand that Tom has been represented by David E. Robbins along with his local counsel in Indiana for this matter. It certainly seems to be an unfortunate outcome for Mr. Buck," Hamburger told On Wall Street. Through Hamburger, Buck previously disputed the reasons for his termination.

At the time, Hamburger defended his client: "None of the actions that comprised the bulk of the U5 that Merrill Lynch relied upon are hardly actions anyone could watch out for," Hamburger says. "Any producer doing any substantial volume of work would find themselves in a vulnerable position, given the standard that Tom Buck's termination establishes."

Robbins was not immediately available for comment on the July 24 FINRA sanction barring his client from working in the industry.


Buck has 12 customer disputes on his BrokerCheck record alleging excessive or unauthorized trading and misrepresentation. Five disputes remain pending, six were settled and one was denied. He was dismissed from Merrill on March 4.

"The fallout is going to be on Merrill and RBC," says Adam Gana, a securities and arbitration attorney based in New York. "When he was discharged from Merrill, that should have been a red flag, but of course he was picked up [by RBC] because he's a billion-dollar producer, so it was a calculated risk."

Merrill Lynch did not comment on the potential for future client claims, but through a spokesman said the firm would cooperate with FINRA.

"We fired Mr. Buck in March following an internal inquiry. We have cooperated with FINRA's inquiry and will continue to do so," said spokesman William Halldin.

As of noon on Tuesday, Buck's webpage was still up on the RBC website, a potential compliance violation, according to legal experts. An hour later, after being contacted by On Wall Street, a spokeswoman for RBC said the site was down.

"If I was in charge of their compliance department I would want to make sure that his information was scrubbed from our website as soon as possible," says attorney Alan J. Foxman of Dew Foxman & Haugh in Delray Beach, Fla.

When an advisor leaves or is terminated, the firm has an obligation to update the information in a timely manner to avoid misleading clients, says Foxman, who is a compliance expert and On Wall Street contributing writer. "What's a timely manner can vary on the circumstances. If somebody resigns, a week may be a reasonable amount of time," he says.

"If someone is barred from the industry, I would imagine you want that information removed as soon as possible."

With reporting from Suleman Din and Andrew Welsch.

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