FINRA Hits Merrill Lynch With $300,000.00 Fine For Failure To Supervise

The Financial Industry Regulatory Authority (“FINRA”) has issued a fine and $300,000.00 fine and censure to Merrill Lynch, Pierce, Fenner & Smith Inc. (CRD#: 7691, New York, New York) pursuant to Letter of Acceptance, Waiver and Consent #: 2014041490801, executed on December 13, 2018. Specifically, FINRA found Merrill Lynch responsible for failing to supervise a securities representative, Eva D. Weinberg (CRD#: 1767814, Miami, Florida), who engaged in a fraudulent scheme.

Merrill Lynch’s Eva Weinberg Defrauds NFL Pro-Bowler Dwight Freeney

FINRA’s Department of Enforcement stated that Merrill Lynch employed Eva D. Weinberg in 2009. Evidently, Weinberg misrepresented her employment history upon joining Merrill Lynch. Particularly, she failed to disclose that she had a five-year employment history with a company controlled by Michael Stern. Allegedly, Michael Stern bribed public officials in regard to his fraudulent schemes and investment projects. Stern reportedly crated a $60,000,000.00 Ponzi Scheme.

By 2010, Eva Weinberg spent much of her time at Merrill Lynch providing financial services to professional athletes. One of those athletes was reportedly a former Chargers and Colts defensive end and seven-time Pro Bowler, Dwight Freeney, who been introduced to Michael Stern by none other than Weinberg. Thereafter, Weinberg helped Michael Stern obtain access to Freeney’s financial accounts. Shortly after Weinberg left the firm, Michael Stern misappropriated several million dollars’ worth of Freeney’s assets.

Merrill Lynch Fails To Investigate Red Flags Concerning Eva Weinberg

FINRA Department of Enforcement stated that Merrill Lynch failed to investigate the red flags pertaining to Weinberg. Specifically, the AWC detailed instances where Weinberg violated Merrill Lynch’s e-mail policies. Weinberg’s e-mails were flagged by Merrill Lynch’s controls, which meant that they were supposed to be reviewed and escalated to supervisors. But Merrill Lynch did not follow its policy.

The e-mails which were not escalated to the supervisors’ attention concerning Freeney. Weinberg directed one of Freeney’s e-mails to Michael Stern. Notably, Weinberg was evidently prohibited from sharing Freeney’s information with anyone outside the firm without the customer’s approval. In addition, the investment addressed in the e-mail was not one which Merrill Lynch offered. Another e-mail concerned a non-disclosure agreement which was indicated by FINRA to present red flag regarding Weinberg’s possible outside business activity or private securities transaction. The third e-mail pertained to Weinberg purportedly attempting to terminate an engagement agreement between an attorney and Freeney.

FINRA Department of Enforcement stated that if Weinberg’s e-mails had been provided to her supervisors and appropriately investigated, it would have uncovered Weinberg’s contact with Michael Stern. Moreover, an appropriate investigation, according to the AWC, would have also uncovered that Weinberg was trying to sell away.

Merrill Lynch Fails To Investigate Lawsuit Against Evan Weinberg

Additionally, FINRA Department of Enforcement stated that Merrill Lynch failed to address a red flag about a garnishment order that it received concerning a lawsuit against Weinberg. Apparently, the firm possessed documents showing that a $1,694,233.10 default judgment had been entered against Weinberg. Those papers, the AWC reported, were not assessed by Merrill Lynch. Plus, Merrill Lynch did not review the complaint, which alleged Weinberg wrote post-dated checks from a bank account in an effort to help Michael Stern avoid his debts. Supposedly, if Merrill Lynch investigated this matter, it would have apparently determined Weinberg was involved with Michael Stern’s affairs.

Furthermore, the AWC reported that Merrill Lynch did not disclose to FINRA the events concerning Weinberg. Apparently, Merrill Lynch’s non-disclosures included the garnishment order, complaint, and felony fraud charges  (that Weinberg later pled guilty to). FINRA reportedly investigated Merrill Lynch after Freeney complained. Given Merrill Lynch’s failure to supervise, FINRA Department of Enforcement stated that Merrill Lynch violated Article V of FINRA’s By-Laws, NASD Rule 3010(a) and FINRA Rules 1122 and 2010.

Customer Files Lawsuit Concerning Merrill Lynch Broker Eva Weinberg

Weinberg’s FINRA BrokerCheck Report shows that a Merrill Lynch customer filed lawsuit #: 215-CV-02376-JGB-PJW in the United States District Court for the Central District of California. Allegedly, Merrill Lynch or Weinberg made unauthorized trades, misrepresented and omitted facts, engaged in forgery, and misappropriated the customer’s money. Ultimately, the lawsuit was settled on August 22, 2017 for $13,000,000.00.

Stern has been imprisoned for 13 years, Weinberg served six months followed by supervised relief.

Lars Soreide Highest Ethical Standard Award 2018

Lars Soreide Highest Ethical Standard Award 2018

Investors who have incurred losses from Merrill Lynch and Eva Weinberg are encouraged to contact Soreide Law Group at (888) 760-6552 for a free consultation. Our firm has recovered millions of dollars for investors who have suffered losses. We represent clients on a contingency fee basis and advance all costs.