Barred Ex-Merrill Lynch Broker, Thomas J. Buck, Pleads Guilty to Securities Fraud And Ordered to Pay the SEC $5 Million
Thomas J. Buck was a former top producing broker for Merrill Lynch from 1981 in its Indianapolis, IN branch office, before he was terminated in 2015. Thomas Buck also worked for RBC Capital Markets in Indianapolis for a short period of time in 2015 before FINRA barred him from the industry.
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), Thomas Buck was barred from the industry for “unethical and improper business practices which generated increased commissions and revenues and enhanced his status as a top-producing broker.” Specifically, FINRA alleges that Thomas Buck “held customer assets in commission-based accounts instead of fee-based accounts in order to generate higher revenues, although he knew that some customers would have paid substantially lower fees by using fee-based accounts.” FINRA additionally alleged that “Buck exercised discretion in customer accounts without written or oral authorization, and made unauthorized trades in certain customer accounts.”
For a copy of the FINRA sanction, click http://www.finra.org/sites/default/files/fda_documents/2015044745701_FDA_JMX1785.pdf
In 2017, The SEC alleged that Thomas Buck misrepresented his commissions and exercised discretion without authorization. Specifically, the SEC alleged that between 2012 and 2015, Thomas Buck placed his clients into commission rather than fee-based accounts, but failed to advise them when his commissions exceeded promised limits. The SEC also alleged that Buck placed unauthorized trades in their accounts. According to the SEC, Buck received more than $2.5 million in excessive commissions and fees from at least 50 clients. Buck pleaded guilty to overcharging clients by millions, and he reached a settlement with the SEC for more than $5 million, including $2.6 million in disgorement of fees.
In a related criminal matter, Buck pleaded guilty to one count of securities fraud and sentenced to 40 months in prison.
Thomas Buck is the subject of 37 customer disputes. The allegations include the following:
- October 2017 – “The Customer alleges excessive trading from December 2011 to February 2015.” The matter settled for $88,201.78.
- February 2016 – “The Customer alleges unauthorized trading, excessive trading and misrepresentation and omission of material facts from January 2009 to March 2015.” The matter 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.” Settled for $395,338.78.
- January 2016 – “The Customer alleges misprepresentation and omission of material facts from January 2010 to March 2015.” Settled for $430,000.
- December 2015 – “The Customer alleges excessive trading from January 2012 to March 2015.” The matter settled for $16,305.00.
For a copy of the Thomas Buck CRD, click https://brokercheck.finra.org/individual/summary/1024868#disclosuresSection
Financial advisors have a legal and regulatory obligation to recommend only suitable investments that are appropriate for their clients’ needs and objectives. Their employing brokerage firm has a legal and regulatory obligation to supervise the Financial Advisors’ sales practices and dealings with clients. To the extent any of these duties are breached, the customer may be entitled to a recovery of his or her investment losses.
In addition, unauthorized trading is a serious allegation based upon a belief that the customer did not approve the purchase or sale of a security prior to execution of the trade. Financial Advisors who engage in unauthorized trading often do so to increase commissions earned from their clients’ accounts.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org.
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