Merrill to Pay Hip-Hop’s Timbaland $2.25 Million in Selling-Away Settlement
Merrill Lynch has agreed to pay hip-hop producer Timbaland $2.25 million to settle allegations of unsuitable investment recommendations and “selling away,” according to regulatory filings.
Timbaland, the stage name of Timothy Mosley, filed an arbitration claim last year seeking $8 million in damages from Merrill for allegedly allowing former broker Andrew LeBlanc II to sell investments outside of the firm’s supervision, misappropriate funds and misrepresent material facts, according to a “snapshot” of the U-5 report that the firm filed with state regulators.
LeBlanc, who worked at Merrill in Manhattan for 21 years before leaving last April to join Bruderman Brothers, a billion-dollar “family office,” did not return a call for comment.
In his own regulatory filing that does not mention Timbaland or Mosley by name, the broker denied the allegations and said he did not personally contribute to the settlement that Merrill reached on June 26.
“I am shocked, dismayed and deeply disappointed that this former client has filed this arbitration against me,” LeBlanc wrote in a summary of his response to the complaint on BrokerCheck. “I deny the claims and look forward to the day this claim is removed from my records.”
Timbaland said in his arbitration complaint that the investments at issue were private placements and limited partnerships recommended by the broker from 2011 to April 2017, the month LeBlanc joined Bruderman.
Oliver Pursche, Bruderman Brothers chief executive, told AdvisorHub last year that LeBlanc joined because he wanted more flexibility in offering clients private investments.
Merrill Lynch spokesman William Halldin declined to comment on the settlement.
LeBlanc’s celebrity list of clients at Merrill also included 50 Cent and Eminem, according to two sources familiar with his practice.
Timbaland, 46, has a net worth of over $85 million accumulated through hits he produced for Justin Timberlake, Jay-Z, Beyonce, Missy Elliot and other stars, according to celebritynetworth.com.
He has invested in a wide range of ventures in the six-year period cited in his arbitration complaint, according to published reports. He purchased a stake in 50 Cent’s headphone company SMS audio in 2013, helped produce action film “Black Coal, Thin Ice,” which grossed $16.8 million, and was an investor in underwear brand Frigo.
A publicist for Timbaland did not return a request for comment sent through Mosley Music’s website.
Securities industry regulators have stepped up their scrutiny of private offerings and of firms’ diligence in monitoring brokers’ outside business activities and investment recommendations. In December, the Financial Industry Regulatory Authority barred a UBS Financial Services broker who reportedly engaged in outside businesses with major-league pitcher Justin Verlander and sold him dozens of private investments.