Finra Suspends Ex-Merrill Chicago Star Bruce Lee for 18 Months
The Financial Industry Regulatory Authority suspended former Merrill Lynch top adviser Bruce Keebeck Lee for 18 months for directing subordinates to complete continuing education requirements.
Lee, whose Chicago-based team was overseeing $2.4 billion of client assets when Merrill fired him in April 2018, agreed to the suspension and a $15,000 fine without admitting or denying the regulator’s findings, Finra said on Wednesday
The suspension will not affect Lee’s ability to operate Keebeck Partners, his new registered investment advisory firm that is not a broker-dealer, said Sally Cates, a spokeswoman for Dynasty Financial Partners, which provides operating and product services to Keebeck. The RIA oversees $887 million in client assets, according to its most recent filing with the Securities and Exchange Commission, and recently launched a hedge fund.
Lee, who allegedly ordered an analyst and a client associate to take 29 continuing education modules between June 2014 and March 2018, did not respond to a request for comment to himself and his lawyer.
The sanctions drive home an ethical message that “shouldn’t need to be sent” but addresses an issue that too many brokers and managers need to hear, said Marc Dobin, a securities industry lawyer in Jupiter, Fla.
“This is Dick and Jane-level stuff. You don’t have someone else take your exam for you or do anything in your name,” said Dobin.
In an age when many in-house compliance requirements are viewed as check-the-box nuisances that can be managed with the simple sharing of a login credentials, however, the sanctions appear necessary, he said.
Finra said Lee violated its wide-ranging Rule 2010 requiring brokers to “observe high standards of commercial honor and just and equitable principles of trade.” In addition to the suspension and fine, it also ordered Lee to complete ten hours of continuing education courses prior to being able to re-associate with a member firm.
Finra did not identify the staff members who assisted Lee with Merrill’s continuing education requirements. The modules included courses on annual compliance acknowledgements, product and sales practices, financial crimes compliance and the Department of Labor’s fiduciary rule, according to the consent order that Lee signed.