Merrill Lynch’s Irish arm fined €2.75m

MERRILL Lynch’s Irish division has been fined €2.75 million by the Financial Regulator — the second highest penalty imposed by the body.

The largest fine involved one of Ireland’s wealthiest businessmen Sean Quinn who was fined €3.25m over the sale of shares in Anglo Irish Bank, where he lost over €1 billion.

The Merrill fine involves two incidents where traders failed to appropriately value their positions at the bank’s London branch.

The first incident was between December 2008 and February 2009, resulting in losses to Merrill Lynch International Bank of $456m while the second took place between May and August of this year, resulting in losses of $5.3m.

Details of the second incident were seen in a probe into the first breach, and the regulator dealt with both cases together.

In both cases the regulator said the breaches involved a failure by the bank to “have in place a well-defined and transparent line of supervisory responsibility; a failure to supervise the trader’s activity and an inadequate month-end independent price verification process”.

The bank has fully rectify the breaches identified by the regulator, it said.

Merrill also promptly notified the Financial Regulator over each case and “fully co-operated with the Financial Regulator and was open and transparent throughout the process”, said the Regulator.