This Merrill Broker Embraced Lending—and Lost His Job
Unlike many brokers at Merrill Lynch, David Ingle welcomed the firm’s attempts to cross-sell loans and other Bank of America products and services to investment clients. But the firm and, now a regulator, said the Arizona advisor went way too far in laying the credit groundwork for clients and prospects.
The Financial Industry Regulatory Authority on Tuesday suspended David W. Ingle from industry membership for 18 months and fined him $10,000 for falsely attesting on Merrill letterhead that a client and a prospect had a lot of collateral in their accounts at the firm.
Ingle, who was still in Merrill’s training program when he wrote the “proof of funds” letters in 2015, said he was encouraged by a firm complex manager to use the parent bank to build client relationships and received verbal authorization on a conference call with the manager and a Bank of America official to write the letters.
“I was doing what I was told,” Ingle said on Wednesday from the office of the registered investment advisor firm Synergistic Wealth Management he now runs in Chandler, AZ .
In an acceptance, waiver and consent letter accepted by Finra’s enforcement department on Tuesday, the regulator said Ingle believed that the two parties he advocated for—including one contemplating a $278 million real estate transaction with no financing—had the financial capacity to do their deals.
His problem? The prospective and current clients did not have the cash or securities in Merrill accounts when he wrote the letters, one of which said the client had “in excess of $57 million in cash at Merrill or its affiliate bank,” according to Finra.
Ingle, who was a loan officer at Bank of America before joining Merrill’s training program in 2013, accepted Finra’s sanctions without admitting or denying the findings that his actions violated the regulator’s Rule 2010 requiring brokers to “observe high standards of commercial honor and just and equitable principles of trade.” The regulator said he also violated firm policy by failing to submit either letter for review prior to sending.
Merrill terminated Ingle in February 2016, citing the “inaccurate” proof of funds letters, according to BrokerCheck.
In his new RIA business, Ingle said he remains a strong advocate of helping clients through investments as well through loans and other credit products. At Merrill, he accumulated $450 million of client assets, often using cross-selling promotions offering loan discounts for transferring retirement accounts and other assets to the firm, he said.
“A lot of [brokers] don’t like to get involved in the lending because they think it muddies the relationship, “ Ingle said. “I find it the other way around.”
Merrill Lynch’s 2018 compensation plan requires brokers to make at least two referrals a year to their bank counterparts in order to qualify for certain bonuses and “recognition” trips. In 2016, clients of Merrill and its private banking cousin U.S. Trust shifted almost $2 billion to Bank of America bank accounts.