Regulatory authorities have banned a former Merrill Lynch advisor from the brokerage sector following a series of reported infractions, including naming his wife as a beneficiary on an elderly client’s accounts and submitting falsified documents to facilitate this.
The self-regulatory organization for the brokerage industry, Finra, initiated an inquiry into Imdadur Rahman after his October 2023 termination from Merrill Lynch, a Bank of America division. At the time, the allegations against Rahman included engaging in unauthorized external business activities, tampering with records, and improperly designating a family member as a beneficiary on a client's account against company policy.
Rahman resolved the charges levied by Finra by entering a settlement without either acknowledging or denying the accusations of wrongdoing. Attempts to contact Rahman for a response were unsuccessful, and his attorney, Todd Holleman, has not provided comments on the matter.
Merrill Lynch's spokesperson has also opted not to comment on the case.
According to the allegations, Rahman orchestrated the addition of his wife to two of his client's accounts between December 2021 and August 2022. This action breached Finra’s Rule 3241, which strictly restricts brokers and their immediate family members from being appointed as beneficiaries to their clients' accounts.
To circumvent Merrill Lynch’s internal policy which bars family members of brokers from being named as beneficiaries, Rahman reportedly misrepresented his wife as the client’s niece on the beneficiary designation forms.
Finra further accuses Rahman of providing various personal services to the client in return for $116,000 and accepting additional monetary gifts totaling at least $47,000. This constituted a violation of Finra’s standards governing outside business activities and ethical behavior.
The services Rahman rendered included purchasing furniture, clothing, and groceries, as well as transporting the client to various appointments. Despite this, Rahman purportedly advised the client that he could not be directly compensated for these services, directing the client instead to make payments to his wife.
In the settlement disclosure, which outlined Rahman's activities, it was noted that he accepted a $47,000 gift after he had repeatedly informed the client of his own financial obligations. Although this document stopped short of accusing Rahman of exploiting his client, it highlighted the receipt of substantial gifts under questionable circumstances.
Finra decided not to impose any financial penalties in the settlement with Rahman.
