Merrill Lynch paying nearly $400K to Missouri

Merrill Lynch, Pierce, Fenner & Smith Inc. will pay $367,500 to a Missouri investor education fund after a multistate investigation determined the company's agent registration practices didn't comply with state law.

According to a news release from Missouri Secretary of State Robin Carnahan, Missouri securities law requires brokers and client assistants who conduct business in Missouri to register with the state Securities Division, even if they're not based in Missouri.

The state began investigating Merrill Lynch's registration and supervision of client associates in May 2008, based on a tip from a former employee who alleged the firm was failing to ensure its associates were properly registered in states where they did business.

The agreement states that Merrill Lynch allowed unregistered associates to sell securities. It notes that, while some client associates were properly registered in their home state and neighboring states, many were accepting trade orders from clients in states where associates were not registered. The company has agreed to pay $367,500 to the Missouri Investor Education and Protection Fund.

"Missouri investors deserve to know their savings are being handled by qualified and properly registered brokers," Carnahan said in the release. "I am pleased we were able to partner with other states to shine light on this practice."

Merrill Lynch will pay more than $26.5 million in fines and penalties to all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.

Other states joining Missouri in the investigation were Arizona, Colorado, Delaware, New Hampshire, Texas and Vermont.