Ex-Merrill Executive Escapes Fine in Case that Cost Firm $415 Million
The single person that the Securities and Exchange Commission charged in a publicized case that cost Merrill Lynch Pierce Fenner and Smith $415 million for allegedly violating customer protection rules was rapped on the knuckles with a cease-and-desist order on Friday.
William Tirrell, who was head of regulatory reporting and a one-time chief financial officer of the Bank of America brokerage unit, allegedly helped design trades that allowed Merrill to reduce its segregated customer funds account by billions of dollars in order to finance proprietary trading, the SEC had charged in June 2016.
It said it was bringing a case against him before an administrative law judge seeking remedies that could include, but not be limited to, civil fines that would likely mean monetary penalties.
Although the SEC publicized its settlement with Merrill in a press release and warned that it would examine other firms for similar customer-protection violations, the decision against Tirrell that included no penalties was issued on a quiet Friday before Labor Day weekend without a press release.
Judith Burns, a spokeswoman at the SEC, declined to comment.
Tirrell, 64, who officially left Merrill in July 2017 and is not now registered with Finra, did not respond to questions when reached at his home in New Jersey on Tuesday.
“The terms of the settlement—no fine, no suspension, no penalty—speak for itself,” Steven M. Witzel, a partner at Fried Frank, which represented Tirrell, said in an e-mailed message. “After four years of investigation by the SEC, Mr. Tirrell is more than ready to put this matter behind him and move on with his life,” he told the news service.
Papers filed during the SEC adjudication by the SEC show that enforcement officials modified their allegation that Tirrell “knowingly reduced” reserves to alleging that he caused Merrill to do so.
The SEC’s settlement with Merrill has spawned a class-action lawsuit filing from a former retail brokerage official on behalf of all customers whose securities or cash Merrill held and used to trade for itself during the alleged infraction period of January 1, 2009 through December 31, 2012.
Several whistleblowers also have filed for a reward relating to the Merrill settlement.
A Merrill spokesman confirmed that Tirrell has left the firm but declined further comment. He had previously noted that no customer lost funds over the firm’s alleged violation of the SEC’s Customer Protection Rule 15c3-3.