Merrill Lynch fired two veteran brokers from its Private Banking and Investment Group two weeks ago for guiding clients to invest in a hedge fund outside of the brokerage firm.
The brokers, Stephen S. Brown and James P. Goetz, were based in Pittsford, New York, a suburb of Rochester, and managed about $2.5 billion (1.53 billion pounds) of assets for clients, according to a source familiar with their practice.
They were fired on Tuesday, Sept. 9, along with two client associates. Other members of their team remain, according to sources in the large office of about 40 individual brokers and teams.
Brown and Goetz, who had been with Merrill since 1991 and 1998, respectively, according to regulatory records, could not be reached for comment.
Selling investments or other products not vetted and processed by an adviser’s employer is known as “selling away” and is a violation of securities industry rules. All advisers in the Pittsford branch were, within 24 hours of the departures, summoned to a meeting at which the seriousness of selling away was explained, several said.
Brown and Goetz continue to be listed as Merrill employees on the BrokerCheck website of the Financial Industry Regulatory Authority, and on their LinkedIn social networking pages. Brokerage firms have 30 days to update notices about brokers charged with violations or dismissed. The BrokerCheck website is http://brokercheck.finra.org/.