Merrill Lynch has reached a settlement with Vermont regulators over its supervision of brokerage accounts used in connection with a long-running fraud case involving a failed ski resort development known as Jay Peak, according to a statement Friday from the state’s Department of Financial Regulation.
The firm agreed to pay $4.5 million to resolve claims from the state regulators and a Securities and Exchange Commission-appointed receiver. They said Merrill’s management and oversight of accounts at issue represented “potential violations” of the Vermont Securities Act, according to a court filing on Thursday.
The Jay Peak scheme had precipitated earlier settlements, the largest by Raymond James & Associates, which in 2017 agreed to pay $150 million over its role in handling accounts tied to the failed ski resort and related real estate development. Raymond James in 2016 also agreed to pay $17 million to the Financial Industry Regulatory Authority for “widespread” and “systemic” failures in its anti-money laundering programs.
In pursuing claims against Merrill, the SEC-appointed receiver alleged that Jay Peak’s owner, Ariel Quiros, had also opened 13 accounts at Merrill as part of the financing of the projects and had unspecified “interactions” with certain entities involved in the fraud.
A Merrill spokesman declined to comment on the matter.
Merrill did not admit wrongdoing or liability in the settlement, which also bars investors from initiating or continuing any...
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