Merrill Lynch Whistleblowers Who Sold Clients Notes That Lost 95% And Then Moved To UBS Took Out Some Insurance First (Recorded Incriminating Calls With A Superior)
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Have you recently sold a product to clients that basically lost all of its value? Do you want to do something to help your investors but have received some pushback from management? Consider taking the following steps:
- Get your boss on the phone and get him talking about how he knows the investment is a real dog but doesn't want to make a big deal of it; have a recording device secretly running the whole time
- Secure a gig at another bank
- Once you've settled in at the new shop, file a whistleblower complaint against your former employer
- Profit!
The Securities and Exchange Commission is preparing a civil enforcement case against Merrill Lynch over an investment that fell as much as 95% in value and was marketed in a way that one of the firm’s financial advisers called “borderline crooked,” people close to the probe said...With clients complaining after the value of the notes plunged, the brokers secretly taped calls with executives at Merrill, left the firm for rival UBS Group AG and then filed a whistleblower complaint over the notes with the SEC...so-called roll costs averaged about 12% of the principal per quarter in the first half of 2011, before falling to an average of less than 4% per quarter in the second half of the year, according to Merrill. In the calls, the brokers allege they were never told the costs could grow so large...The advisers were told on the calls not to suggest to their clients the product was flawed. “What you’d love to do is avoid customer complaint,” Mark Ryan, a manager at the firm, told Messrs. Ringwall and Manion. “We can’t just tell everyone, ‘Hey this is a defective product.’”
In making your recordings, something like "Hey this is a defective product" would be ideal, but some variation is expected. Follow all these steps and you'll 1. Ingratiate yourself to your clients, helpfully directing their anger exclusively toward higher-ups ("...investors say in [Finra] claims that they aren’t complaining about the conduct of Messrs. Ringwall and Manion, who sold them the notes") and 2. Maybe see a little extra cash thrown your way at the end of all this.
The advisers can claim a reward if their tip leads the SEC to bring a case against Merrill and impose sanctions of more than $1 million.
SEC Readies Case Against Merrill Lynch Over Notes That Lost 95% [WSJ]
