Renegade Merrill Broker Tom Buck Admits to Fraud, Faces 25-Year Sentence
Tom Buck, Merrill Lynch’s former top producer in Indiana, faces up to 25 years in prison after agreeing to plead guilty on Tuesday to securities fraud, according to a from federal prosecutors.
Buck, 63, a top-ranked Barron’s broker for many years running, admitted to securities fraud for overcharging clients $2 million in excessive commissions and for failing to recommend lower-priced fee-based accounts, said U.S. Attorney for the Southern District of Indiana Josh Minkler.
The former broker, who worked briefly at RBC Capital Markets after Merrill fired him in 2015, also agreed on Tuesday to pay $5 million to settle civil fraud charges from the Securities and Exchange Commission. He will disgorge about $2.9 million and pay a fine of $2.2 million.
“These are not victimless crimes,” W. Jay Abbott, Special Agent in Charge of the FBI’s Indianapolis Division, said in a prepared statement. “These are crimes that can wipe out a family’s life savings and leave their financial future in ruins.”
Merrill cooperated with the federal investigation, according to Minkler. Buck “repeatedly” lied to Merrill compliance personnel by saying he informed customers in commission accounts over which he had discretion that cheaper pricing options were available to them, the prosecutor said.
Merrill has not been charged by regulators over supervisory or other deficiencies, and has repaid customers who were harmed by Buck’s behavior, a company spokesman said. According to Buck’s BrokerCheck history, Merrill has paid between $16,000 and $719,000 to settle 33 customer complaints.
The Financial Industry Regulatory Authority in July 2015 barred Buck from associating with a member firm.
The Buck Group at Merrill ranged from 15 to 20 brokers who generated between $6 million and $10 million in annual fees and commissions from around 800 households between 2009 and early 2015, Finra enforcement officials said at the time. Buck was personally credited with 85% of the revenue, and 80% of his accounts were commission-based, according to the acceptance, waiver and consent order that the broker signed with the regulator.
Buck’s lawyer, David E. Robbins of Kaufmann Gildin & Robbins in New York, declined to comment.
Buck’s daughter, Ann E. Buck, was part of his team and remains a broker at an RBC office in Indianapolis, according to her BrokerCheck history.