January 20, 2011

Merrill Lynch fined over 529 plans

The Associated Press

WASHINGTON - Industry regulators have fined Bank of America Corp.'s Merrill Lynch unit $500,000 because of oversight failures involving sales of college-savings products called 529 plans.

The Financial Industry Regulatory Authority also censured Merrill Lynch in a disciplinary action disclosed Tuesday.

FINRA found that Merrill Lynch failed to maintain adequate supervisory procedures to ensure that its representatives were considering the potential tax benefits of recommending a client choose a 529 plan in the state where he lives, rather than an out-of-state plan.

The plans allow money to be withdrawn for college expenses free of federal taxes.

In the time covered by the FINRA agreement, Maine's NextGen was the only 529 that Merrill Lynch sold nationwide.


Were you interviewed for this story? If so, please fill out our accuracy form

Send question/comment to the editors

Further Discussion

Here at PressHerald.com we value our readers and are committed to growing our community by encouraging you to add to the discussion. To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use.

Questions about the article? Add them below and we’ll try to answer them or do a follow-up post as soon as we can. Technical problems? Email them to us with an exact description of the problem. Make sure to include:
  • Type of computer or mobile device your are using
  • Exact operating system and browser you are viewing the site on (TIP: You can easily determine your operating system here.)