On October 31, 2017, Carmel, Indiana financial advisor Thomas J. Buck, 63, was charged under federal securities laws with one count of securities fraud. The unsealed criminal charges brought in the U.S. District Court for the Southern District of Indiana allege that Mr. Buck defrauded his clients by charging excessive commissions. Mr. Buck has agreed to plead guilty to the charge.
From 1981-2015, Mr. Buck was a registered financial advisor with Merrill Lynch, Pierce, Fenner & Smith (“Merrill Lynch”), which since January 2009 has operated as a division of Bank of America. The unsealed criminal charges allege, that in recent years, Mr. Buck defrauded some clients by charging excessive commissions, while intentionally failing to advise them of cheaper options for services rendered. Specifically, it is alleged that Mr. Buck took discretion over certain accounts, and in these accounts placed trades without client authorization, resulting in clients paying commissions on these trades. It is further alleged that Mr. Buck informed clients that they were paying less in commissions than were actually charged, and that he also allegedly failed to inform certain clients that a fee-based payment structure was available which could result in financial savings to the client(s).
As a result of the alleged fraudulent enterprise, it is estimated that Mr. Buck’s activities caused clients to incur aggregate losses of approximately $2 million. According to Assistant U.S. Attorneys Cynthia J. Ridgeway and Nick Linder, who are handling prosecution of the case, Mr. Buck has agreed to plead guilty and could face up to 25 years in prison. Contemporaneous with the unsealing of the criminal charges, Mr. Buck has also agreed to a monetary settlement with the Securities and Exchange Commission (“SEC”) in the amount of approximately $5 million.