Fired Merrill broker took client money for kids’ schooling: Finra

Finra suspended Adam C. Smith for one year and imposed a $10,000 fine for accepting gifts totaling $105,000.

A fired Merrill Lynch broker accepted $105,000 in gifts from two customers, and used at least some of it to pay for his children’s education, according to a Financial Industry Regulatory Authority Inc. settlement.

Finra suspended the broker, Adam C. Smith, from the securities industry for a year and fined him $10,000, according to the settlement.

Mr. Smith began his securities industry career in 2002 with Merrill Lynch, according to his BrokerCheck profile. Starting in 2006, Mr. Smith served as the registered rep for a married couple, according to the Finra settlement. Between October 2010 and January 2011, the couple gave Mr. Smith and his wife checks totaling $26,000 to be used for the education of their children, according to Finra. After one of the spouses died, the remaining spouse gave Mr. Smith and his wife additional checks totaling $53,000 for their children’s education.

The Finra settlement did not detail how Mr. Smith spent the other $26,000 he received from his clients.

Merrill Lynch prohibits its employees from accepting checks or cash as gifts from customers. When confronted by Merrill Lynch, Mr. Smith denied the allegation. Mr. Smith was fired last May.

Mr. Smith consented to the settlement without admitting or denying its findings. He did not return a call left for him at his new firm, Cabana Asset Management.

A spokeswoman for Merrill Lynch, Susan McCabe, did not return a call to comment.