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.
FINRA BrokerCheck indicates that Mr. Buck has been barred from the securities industry. As disclosed by FINRA, on March 4, 2015, Mr. Buck was discharged from his employment with Merrill Lynch in connection with “allegations including failing to discuss service level and pricing alternatives with a customer, providing inaccurate information to firm management during account reviews regarding this issue, mismarking bond cross trade order tickets as unsolicited, and providing information to a client during an active account review that did not correspond to the firm’s records.”
Since May 2006, Mr. Buck has been involved in a total of 39 customer complaints; currently 36 of these complaints resulted in a settlement. The majority of these complaints reportedly concern allegations including unauthorized trading, misrepresentations and/or omissions of material fact in connection with commissions charged, as well as excessive trading.
Brokerage firms like Merrill Lynch have a duty to ensure that their registered representatives are adequately supervised. Brokerage firms must also take reasonable steps to ensure that their financial advisors follow all applicable securities rules and regulations, in addition to internal policies and procedures. In instances when brokerage firms fail to adequately supervise their registered representatives, they may be liable for losses sustained by investors.
At Law Office of Christopher J. Gray, P.C., our securities attorneys have successfully resolved a number of disputes on behalf of aggrieved investors, including losses sustained due to instances of excessive trading or churning, and related broker misconduct. Investors may be able to recover their losses in FINRA arbitration. Investors who wish to discuss a possible claim may contact a securities arbitration attorney via the contact form on this website, by telephone at (866) 966-9598, or by e-mail at email@example.com for a no-cost, confidential consultation.