Merrill Lynch Agrees to Admit Wrong-Doing in SEC Case
Merrill Lynch admitted wrong-doing in a SEC case.

Merrill Lynch took off its mask.

The bank admitted to misleading customers about how it was handling their orders. It faces a $42 million penalty.

"Merrill Lynch called this practice 'masking.' Masking entailed reprogramming Merrill Lynch's systems to falsely report execution venues, altering records and reports, and providing misleading responses to customer inquiries," stated the SEC filing. 

According to the SEC, the bank stopped masking in May 2013, but it failed to tell customers about its past masking. It claimed that it did 15 million 'child orders,' which are portions of larger orders. In total, those child orders equaled five billion shares executed by third-party brokers, not Merrill Lynch.

"By misleading customers about where their trades were executed, Merrill Lynch deprived them of the ability to make informed decisions regarding their orders and broker-dealer relationships," said Stephanie Avakian, co-director of the SEC's Enforcement Division. "Merrill Lynch, which admitted that it took steps to ensure that customers did not learn about this misconduct, fell far short of the standards expected of broker-dealers in our markets."

Merrill Lynch admitted its guilt and will pay the $42 million penalty.

More from Politics

Targeting a Trade in Zuora, and Here's Why: Market Recon

Targeting a Trade in Zuora, and Here's Why: Market Recon

Jeb Bush: Mid-Terms Could Be Another Wave Election

Jeb Bush: Mid-Terms Could Be Another Wave Election

If You Must Trade Tilray, Use This Options Play: Market Recon

If You Must Trade Tilray, Use This Options Play: Market Recon

Trump Should Pay Attention to LNG -- and His 'Energy' Donors

Trump Should Pay Attention to LNG -- and His 'Energy' Donors

China Empire Strikes Back at U.S. LNG

China Empire Strikes Back at U.S. LNG