The Institutional Investor Money Management Letter reported that Merrill has sent letters to all its clients terminating their contacts. According to the news source, Merrill’s announcement in December that the Securities and Exchange Commission (SEC) had started an investigation into its Florida consulting practice and Senior Vice President Michael Callaway (See SEC Looks into Merrill’s Florida Pension Consultancy Practice) was followed by a string of personnel departures.
“People have chosen to leave, and that impedes our ability to provide the same level of excellent service that our clients expect from us,” said Merrill spokesman Mark Herr, according to the news report. “We are working with them on a transition to other consultants.”
The Miami Herald reported in December that the board of trustees for South Miami’s pension plan filed an arbitration claim alleging that, rather than looking out for the interests of city employees, Merrill Lynch pursued an investment strategy intended to generate excessive fees and commissions. Soon after, Jacksonville Police and Fire Pension Fund trustees announced the termination of the fund’s contract with Merrill. Callaway, head of the Florida consulting business, took a leave of absence. (See South Miami Pension Trustees File Claim over Merrill Consulting Practices)
Merrill has denied any wrongdoing, the news report said.