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July 23, 2019

Merrill Lynch pays $40 to Settle Churning Claim

According to a CNBC report, Merrill Lynch has paid $40 million to settle a customer complaint against a former Boston area broker named Charles Kenahan.  The customer, Robert Levine, was a co-founder of Cabletron Systems.  Levine filed a complaint with FINRA alleging that Kenahan made unsuitable investment recommendations and churned his account from February 2012 to December 2017.  Merrill Lynch settled the claims with Levine after the case went to a final hearing before an arbitration panel.

According to Kenahan’s BrokerCheck report, he has two other FINRA complaints pending against him for excessive trading and unsuitable investment recommendations.  One complaint was allegedly filed by Craig Benson, the former governor of New Hampshire and a co-founder of Cabletron with Levine.  Benson’s complaint seeks damages in excess of $42 million.  The other complaint pending against Kenahan seeks damages of $700,000.

Earlier this month, Merrill Lynch fired Kenahan due to “Customers’ allegations of unauthorized trading, unsuitable investment recommendations and excessive trading.”

If you believe that you have been misled by a financial advisor or wish to engage the services of a securities lawyer, please call the Costello Law Group at 410-832-800 (or Toll Free 877-418-0003) for a free consultation. Tom Costello of the Costello Law Group has 25 years of experience in stockbroker misconduct and investment fraud.