US - A Securities and Exchange Commission (SEC) probe into Merrill Lynch's pension consulting business in Florida has led to the exit of its senior vice president.
Merrilll Lynch has sent letters to its clients in Florida about the SEC inquiry, which began about two years ago into certain aspects of its pension consulting business.
The first was sent by Michael Callaway, senior vice president at Merrill Lynch, who has spent more than 30 years at the firm, 20 of which have been spent in pension consulting.
The letter stated: “Last week I learned that the staff of the SEC has taken issue with some of Merrill Lynch’s and my practices. In short, the SEC staff believes that the firm and I did not tell you all the relevant information about your fees, manager selection, alleged conflicts of interest and what I earned in connection with providing you with consulting services.”
The second letter, sent by Donald Plaus, managing director at Merrill Lynch, outlined that the firm had determined Callaway should take a leave of absence, effective immediately, to defend himself against the allegations brought by the SEC. Callaway was responsible for approximately 100 public and private clients in Florida.
Merrill Lynch confirmed it had sent the letters and a spokesperson said: “Irrespective of this matter, there are two facts that cannot be argued. First, our Florida consulting services clients generally have prospered during the years we advised them.
“Second, the firm is confident that its pension consulting business still offers its clients sophisticated expertise, sound advice and that changes the firm has made in the past year have made those services more transparent and more client friendly.”
The SEC refused to comment.
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