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Finra Suspends, Fines Ex-Merrill FA Over Know Your Customer Rule

By Alex Padalka June 8, 2021

The Financial Industry Regulatory Authority says it has suspended a former Merrill Lynch financial advisor discharged for allegedly violating the wirehouse’s “Know Your Customer” requirements for foreign accounts.

In May 2009, while registered with Merrill, Woong Seong Hwang allegedly opened an account for a customer who Hwang knew was residing in Korea and wasn’t a U.S. citizen, the industry’s self-regulator says in a letter of acceptance, waiver and consent published last week. Despite it, Hwang allegedly falsely certified in the firm’s electronic account opening system that the customer was a U.S. citizen residing in New Jersey, at the address of a mutual friend of the customer and Hwang, Finra says.

Hwang then allegedly certified the information about the residency and citizenship when opening subaccounts for the same customer in 2014 and 2016, according to the letter of acceptance.

Merrill discharged Hwang in July 2017 over allegations that he had “caused inaccurate Know Your Customer information to be recorded at the time of an account opening and thereafter,” according to BrokerCheck.

In Hwang’s Form U5 termination notice dated Aug. 2, 2017, Merrill said it discharged him over “[l]oss of trust and confidence regarding [his] appreciation for and adherence to the firm’s Know Your Customer standards, and his understanding of when to escalate issues to his supervisor,” according to letter of acceptance.

In the broker comment section of his discharge, Hwang wrote that he “faithfully served his clients at Merrill Lynch for 15 years and established an impressive and substantial list of individual and corporate clientele.”

Moreover, Hwang claimed that he had not caused “inaccurate Know Your Customer information to be reported since the customer actually provided the information in question to him directly.”

However, last week, Hwang consented to a 45-business-day suspension and to pay a $5,000 fine without admitting or denying the findings, Finra says. In addition, Hwang agreed to complete 20 hours of continuing education on anti-money laundering within 90 days of reassociation with another Finra member firm, according to the self-regulator.

Hwang began his financial services industry career in 2001 at Samsung Securities and joined Merrill in 2002, according to his BrokerCheck profile. After his discharge from Merrill in 2017, he became registered with Snowden Lane, where he remains, according to BrokerCheck.

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Tags:  Regulatory/legal issues , Merrill Lynch , Financial Industry Regulatory Authority

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