Finra bars rep fired by Merrill Lynch over improper fund sales

The Financial Industry Regulatory Authority Inc. has barred Bhenoy Dembla, who was discharged by Merrill Lynch in 2016, for falsifying documents in connection with sales of mutual funds.

Mr. Dembla, who worked in Chicago and joined Merrill Lynch in 2001, entered fictitious sell orders to circumvent protections of the firm’s electronic order system, which prevents the entry of a purchase order for Class B shares if it would cause the client to accumulate shares above the accumulation limit.

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After entering the sell order, Mr. Dembla would then enter a purchase order, which would be accepted; afterward, he would cancel the fictitious sell order. As a result, the customer would exceed the thresholds for Class B shares, Finra said. From December 2015 through April 2016, Mr. Dembla placed and then later cancelled 41 fictitious sell orders to execute 29 purchases of Class B shares, which caused the accounts of 18 customers to exceed the accumulation limit by a total of $863,000. He also provided false entries on each order regarding why the customer purportedly wanted to sell the fund, according to a Finra letter of acceptance, waiver and consent.

Merrill Lynch subsequently provided $31,801 in restitution to these customers, the letter said.

Related Topics: Financial Industry Regulatory Authority, Merrill Lynch