SEC Looks into Merrill’s Florida Pension Consultancy Practice

Merrill Lynch is under scrutiny from the Securities and Exchange Commission (SEC) for allegations that its Florida consulting operation charged hidden fees and engaged in conflicts of interest, according to letters it sent to various pension boards in the state.

According to the news report from the South Florida Sun-Sentinel, Merrill works with about 100 public employee pension funds in the state. The company sent a letter to these boards on October 29 detailing the allegations with which it is faced.

The letter, according to the news report, said that the SEC has indicated it believes that Merrill Lynch and Mike Callaway, a senior vice president and the head of Merrill’s Florida consulting business, violated federal regulations.

Callaway wrote a separate letter to clients that said SEC believes that “the firm and I did not tell you all of the relevant information about your fees, manager selection, alleged conflicts of interest and what I earned in connection with providing you with Consulting Services.”

Callaway has been put on a leave of absence, according to the news report.