US - The Jacksonville Police and Fire Pension Board of Trustees has dumped Merrill Lynch Consulting Services (MLCS) as its consultant.
MLCS was sacked yesterday at special session by the board, after it was informed the Securities and Exchange Commission (SEC), was looking into practices engaged by Merrill Lynch and it’s senior vice president, Mike Callaway.
Merrilll Lynch recently sent letters to its clients in Florida about the inquiry, informing them that the SEC believed the firm and Callaway did not tell them all the relevant information about fees, manager selection, alleged conflicts of interest and what Callaway earned in connection with providing consulting services.
MLCS has provided independent fiduciary guidance to the Board for over 20 years.
A spokesperson for Merrill Lynch said: “We regret that they have made this decision and stand ready to help them through this period of transition.”
The Board of Trustees said in a statement: “The staff of the Board has cooperated fully with the SEC staff during the investigation and has no detailed knowledge of the particular practices the SEC staff believes to violate regulatory prohibitions, nor does the Board by its actions today express a view of the SEC staff recommendations.”
This development comes just one day after Global Pensions reported the SEC probe had led to the exit of Callaway.
In a second letter, 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.
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