NEW YORK (Reuters) - A former Bank of America Merrill Lynch broker has agreed to plead guilty to a criminal charge of securities fraud for billing clients excessive commissions, according to federal court documents unsealed on Tuesday.
Tom Buck, once a top Merrill Lynch financial adviser in Indiana, could face up to 25 years in prison if convicted.
In a parallel case, Buck agreed to pay $5 million to settle civil charges brought with the U.S. Securities and Exchange Commission, which alleged that Buck overcharged at least 50 clients around $2.5 million in fees and commissions.
Robert Hammerle, Buck’s lawyer in the criminal case, said his client admitted he overcharged clients, but that all of the clients made money and none “lost their life savings.”
“This was not a case where all of his clients were on the Titanic,” Hammerle told Reuters. “They were on the Queen Mary. They had an excellent voyage, and were overbilled for their rooms.”
Buck, 63, was fired in March 2015, after nearly 30 years at Merrill Lynch, for “failing to discuss service level and pricing alternatives with a customer” and for giving false information to managers who were looking into the matter, according to a statement Bank of America submitted to regulators after Buck’s termination.
Buck, who went to work at RBC Wealth Management-U.S. after Bank of America fired him, was permanently banned from the brokerage industry by the Financial Industry Regulatory Authority (FINRA) in July 2015.
Buck and Bank of America have paid more than $5.3 million in settlements to aggrieved clients in 32 different customer disputes since he was fired, according to FINRA records.
“We have resolved issues raised by clients since Mr. Buck’s termination in 2015, and proactively reached out to all clients who may have been affected by his conduct,” Bank of America spokesman Bill Halldin said.
Jonell Lundquist, a spokeswoman for RBC Wealth Management, said Buck’s actions took place when he worked for another firm, and “in no way related to any activities during his brief time with RBC.”
Hammerle said his client would seek probation at a court hearing next month, and would argue that his clients did not lose money.
(The story corrects in first paragraph that broker has not yet pleaded guilty)
Reporting By Elizabeth Dilts; editing by Susan Thomas