As a seasoned financial advisor and legal expert with over a decade of experience in both sectors, I’ve seen my fair share of cases involving alleged misconduct by financial professionals. The recent complaint filed against Boston-based advisor Melissa Spangler is a serious one that warrants attention from investors and regulators alike.
According to the complaint, filed in September 2024 in Suffolk Superior Court, Ms. Spangler allegedly:
- Facilitated unauthorized transfers
- Failed to act on fiduciary misconduct and fraud
- Assisted in opening accounts
The pending complaint seeks unspecified restitution, an injunction, and potential penalties and/or fines. These are grave accusations that, if proven true, could have significant consequences for Ms. Spangler and Merrill Lynch, the prominent broker-dealer she’s been registered with since 2009.
It’s important to understand the rules and regulations surrounding unauthorized transactions. FINRA Rule 3260 specifies the conditions under which brokers like Ms. Spangler may effect transactions in a customer’s accounts without first consulting the customer. This is known as discretionary trading, and it “generally means the broker can decide at any time how much of a stock, bond or other security to buy or sell, and at what price, without customer input.”
Rule 3260 states that brokers may not use discretionary authority without the customer’s prior written authorization, as well as their firm’s approval of the customer’s account for discretionary trading. Similarly, FINRA Rule 2020 prohibits financial advisors from effecting transactions or inducing the purchase or sale of securities through manipulative, deceptive or fraudulent means. Violations of these rules can lead to advisors being held liable for damages.
Ms. Spangler’s background is also noteworthy. She holds 20 years of securities industry experience and has been registered with Merrill Lynch in Boston since 2009. Her past registrations include stints at Banc of America Investment Services and Quick & Reilly. She has passed several securities industry qualifying exams, including the Series 7, SIE, Series 6TO, and Series 66.
While Ms. Spangler’s experience and credentials are impressive, it’s crucial to remember that even seasoned professionals can engage in misconduct. As the famous saying goes, “Trust, but verify.” Investors should always carefully review their account statements and question any unauthorized or suspicious activity.
According to a 2019 FINRA study, bad financial advisors cost investors an estimated $20 billion annually. Complaints like the one against Ms. Spangler serve as a reminder of the importance of due diligence and the need for robust oversight in the financial industry.
If the allegations against Ms. Spangler are substantiated, she could face serious consequences, including fines, suspensions, or even a permanent bar from the securities industry. Merrill Lynch may also face penalties for failure to supervise. The case underscores the critical role of regulators like FINRA in protecting investors and maintaining the integrity of financial markets.
As the complaint against Ms. Spangler progresses, it will be important to monitor developments closely. Investors who believe they may have been harmed by unauthorized transactions or other misconduct should consider consulting with experienced legal counsel to discuss their rights and potential remedies.
While the vast majority of financial advisors are honest and ethical professionals, cases like this highlight the need for constant vigilance. By staying informed, asking questions, and working with trusted advisors, investors can help safeguard their financial futures.
