FINRA has fined Merrill Lynch, Pierce, Fenner & Smith Incorporated $225,000 and censured the firm after finding it failed for years to report thousands of customer complaints that surfaced in call center survey responses.
The settlement gives the case its immediacy today: a multi-year compliance lapse ended with a formal penalty, and the firm has agreed to pay the fine and accept the censure. For customers who called Merrill Lynch’s centers between January 2018 and December 2023, the issue was not just what they said on the phone but what they wrote afterward in a survey that should have been reviewed more carefully.
From January 2018 through December 2023, Merrill Lynch invited callers to complete a post-call survey that included a written commentary section. FINRA said the firm did not reasonably review those responses to identify complaints, and as a result did not report thousands of customer complaints to the regulator. The lapses were tied to reporting obligations under FINRA Rule 4530(d), which requires firms to provide quarterly summary and statistical complaint data.
The failure also touched on the firm’s supervision duties. FINRA said Merrill Lynch did not reasonably supervise to achieve compliance with those complaint-reporting obligations and violated FINRA Rules 4530(d), 3110(a) and (b), and 2010. The written comments were not an obscure side channel; they were part of a survey the firm itself invited customers to complete after calls to its centers. That is what makes the case harder to dismiss as a paperwork mistake.
The open question is not whether the firm will face more punishment from this matter, but how many complaints were missed inside the category described only as thousands. FINRA’s order closes the enforcement action with a $225,000 fine and a censure. For Merrill Lynch, the cost is modest by Wall Street standards, but the finding marks a breakdown that lasted six years and went to the core of how customer complaints are captured, reviewed and reported.
