Tom Buck, Merrill’s Former Top Indiana Broker, Gets 40 Months in Prison
Thomas Buck, a former Merrill Lynch star who pled guilty to overcharging his clients by more than $2 million in excessive commissions and failing to inform them about potentially less expensive fee accounts, was sentenced to almost three-and-a-half years in prison on Wednesday.
The U.S. Attorney’s Office in the Southern District of Indiana had sought six-and-a-half years but Judge James R. Sweeney II of U.S. District Court in the Southern District of Indiana cited charitable activities and the unlikelihood of Buck’s repeating his crimes in imposing the lesser sentence, according to the “Indianapolis Business Journal.”
“I make no excuse,” the 65-year-old broker said after the sentencing, according to the report. “I have let down nearly everyone who has ever meant anything to me.”
Buck pled guilty 13 months ago, and the Securities and Exchange Commission and the Financial Industry Regulatory Authority earlier barred him permanently from the securities industry. Regulators also ordered him to disgorge $2.9 million received from more than 50 customers over three years and to pay a civil fine of $2.2 million.
Buck, who Barron’s crowned as the top broker in Indiana from 2012 through 2014, has settled some 35 customer complaints since Merrill discharged him in March 2015.
The former broker failed to disclose “pricing alternatives” to a customer, lied to Merrill management about whether he discussed fee-based alternatives to brokerage accounts, mismarked bond order tickets as unsolicited and gave a client inaccurate account review information, Merrill wrote on his U-5 termination filing.
In pre-sentencing filings, Buck’s defense team filed an expert witness report arguing that his clients would have paid more than they were charged if they had they been in fee-based advisory accounts.
“All of the people in this who were listed as victims profited handsomely from Tom’s guidance over the years,” said Robert W. Hammerle, one of his defense lawyers at the firm of Hackman Hulett in Indianapolis. “That doesn’t excuse what he did, but this isn’t a Bernie Madoff case.”
Buck, who had worked at Merrill for 33 years, was managing about $1.3 billion for around 800 household accounts and had a team of as many as 20 brokers, the Financial Industry Regulatory Authority said in barring him.
The team generated between $6 million and $10 million between 2009 and early 2015, and Buck was personally credited with 85% of the revenue. About 80% of his accounts were commission-based, according to the acceptance, waiver and consent order that he signed to settled Finra’s charges
Merrill, which was not a party in the regulatory or legal action, has reimbursed Buck’s victims, company officials have said.
Following his dismissal from Merrill, Buck worked for three months at RBC Capital Markets in Indianapolis. His daughter Ann E. Buck was part of his team and remains with RBC, according to her BrokerCheck history.
Despite Buck’s notoriety, another 65-year-old former wirehouse broker in the Midwest this week received a sentence almost three times as long.
John Maccoll, of Rochester Hills, Michigan, was ordered to serve nine years in prison for embezzling over $3.7 million from his clients at a UBS Financial Services branch in Birmingham, according to an announcement on Wednesday from the U.S. Attorney’s office for the Eastern District of Michigan.
Maccoll in August pled guilty to convincing more than a dozen clients between 2010 and 2018 to wire money to his personal accounts or write him checks that he said he would use to make investments in funds UBS didn’t provide. He kept the money for personal use but told customers that the funds were performing well, the government charged.
“Let this sentence be a deterrent to anyone who tries to take advantage of those who seek to invest their hard-earned money for their retirement,” said U.S. Attorney Matthew Schneider.
A spokesman for UBS, which was not named in the criminal complaint, did not immediately return a request for comment.