San Juan, Puerto Rico–December 5, 2016. The Securities Arbitration Law Firm of Klayman & Toskes, P.A. (“K&T”), www.nasd-law.com, continues to investigate FINRA arbitration claims against Merrill Lynch, a subsidy of Bank of America, N.A. (NYSE:BAC), for its margin lending practices related to concentrated investments in Puerto Rico bonds and leveraged closed-end bond funds (CEBFs). The Financial Industry Regulatory Authority (FINRA) recently fined Merrill Lynch $6.25 million for failure to supervise the recommended use of borrowed funds to invest in securities. Additionally, Merrill Lynch agreed to “pay roughly $780,000 in restitution to 22 customers who had 75% or more of their assets invested in Puerto Rico bonds and funds and suffered huge losses trying to liquidate them to meet margin calls.” K&T is currently investigating the sales practices of Merrill Lynch’s for violations related to unsuitable concentration in Puerto Rico bonds and leveraged CEBFs.
K&T’s investigation focuses on recommendations by Merrill Lynch to use loans secured by their Puerto Rico bonds and leveraged CEBFs. Recommendations to use borrowed funds to invest in Puerto Rico bonds and leveraged CEBFs resulted in undue risks for investors with moderate to conservative risk tolerances. Merrill Lynch investors suffered greater losses and margin calls from the use of borrowed funds provided by their parent company, Bank of America, N.A.
The sole purpose of this release is to investigate sales practice violations by Merrill Lynch on behalf of our clients. The sales practice violations may include unsuitable investment recommendations, margin calls, conflicts of interest, misrepresentations and omissions of material facts and a failure to supervise. Merrill Lynch customers who have information about the sales practices of the firm related to concentrated investments in Puerto Rico bonds, CEBFs through borrowed funds provided by Bank of America, N.A. are encouraged to contact Lawrence L. Klayman, Esq. or Steven D. Toskes, Esq. of Klayman & Toskes, P.A. at (787)-919-7325, or visit our website at www.perdidasenbonospr.com/en/.