FINRA imposed a $225,000 fine and issued a censure against Merrill Lynch, Pierce, Fenner & Smith Incorporated after finding the firm failed to report thousands of customer complaints collected in call-center post-call surveys from January 2018 through December 2023.
The regulator concluded Merrill Lynch violated FINRA Rules 4530(d), 3110(a) and (b), and 2010 by not reasonably reviewing written survey commentary and by failing to reasonably supervise compliance with quarterly summary and statistical customer complaint reporting obligations under Rule 4530(d). The penalty resolves the enforcement action with a single monetary sanction and a formal censure.
The misconduct centers on a post-call survey program the firm ran for six years. Customers who phoned Merrill Lynch call centers were invited to complete the survey, which included a written commentary section. FINRA’s action says the firm did not reasonably review those written responses to identify customer complaints and, as a result, did not report thousands of complaints to the regulator.
That shortfall matters because Rule 4530(d) requires firms to report customer complaints in a quarterly summary and statistical format so regulators can monitor trends and firms’ responses. FINRA’s determination ties the failure to report directly to the firm’s supervisory shortcomings: Merrill Lynch did not reasonably supervise its systems and personnel to ensure survey commentary was reviewed for reportable complaints, a lapse the regulator treated as a rules violation.
The most concrete figures in the case are the penalty and the timeframe. FINRA’s sanction — $225,000 — covers conduct during the period beginning January 2018 and ending December 2023. Beyond those markers, the regulatory record emphasizes scale rather than a precise count: FINRA found that the firm failed to report thousands of customer complaints, not isolated instances.
The friction in the record is straightforward. Merrill Lynch expressly invited customers to provide written commentary after calls, but the firm’s internal processes did not reasonably surface complaint information from that commentary for reporting. In regulatory terms, inviting free-form written feedback without adequate review created a gap between what customers told the firm and what the firm reported to FINRA.
Merrill Lynch accepted the censure and agreed to pay the monetary sanction as the settlement’s resolution. The action does not provide a public breakdown of how many survey responses contained reportable complaints or the precise administrative steps the firm will take to close the supervision gap identified by FINRA.
The unresolved question left by the settlement is the size of that gap: how many reportable complaints embedded in post-call survey comments went unreported across the six-year period. The enforcement action fixes a penalty and a censure to the record; it does not disclose an exact tally of affected survey responses or a detailed remedial plan in the public record, leaving the scale of unreported complaints as the central outstanding detail for customers and market observers.
