Bank of America Merrill Lynch has paid a hefty $40 million to settle “churning” allegations involving a former broker, according to filings and sources familiar with the case. It’s the largest such settlement in at least a decade.
The recipient of the settlement is Robert Levine, co-founder of one-time network equipment maker Cabletron Systems, according to the sources.
They said the case went to a final hearing in front of an arbitration panel before Merrill decided to settle. A second complaint also seeking about $40 million in damages and involving the same broker is pending.
The advisor involved is Charles Kenahan, according to FINRA’s BrokerCheck. The complaint was filed in March 2018 for allegations of “unsuitable investment recommendations, excessive trading and misrepresentation from February 2012 until December 2017.” This practice is commonly called churning.