FINRA has permanently barred Bhenoy Dembla (CRD# 4357042) over claims that he falsified documents concerning the sale of mutual funds. Dembla had been employed by Merrill Lynch from March 2001 through September of 2016.
The FINRA findings indicate that Dembla purposefully circumvented Merrill Lynch’s electronic order system that provides protections and restrictions from mutual fund providers on the amount of Class B shares a single investor may own. The system would have prevented the submission of Class B share purchase orders once they exceeded an accumulation limit. FINRA found that Dembla would falsify and submit fake sales orders, which the system would accept, and then promptly cancel the orders so certain customers’ accounts could exceed restrictions. Between December of 2015 and April of 2016, FINRA claims Dembla sold over $860,000 in excess of the accumulation limit on the accounts of 18 customers.
Dembla was formally discharged by Merrill Lynch in September 2016 and has four settled customer complaints from 2016 and 2017 involving excessive trading and unsuitable investments.
Dembla’s sanction and ousting from the securities industry comes after FINRA issued an alert to investors cautioning against the purchase of Class B mutual fund shares when purchasing a different mutual fund share class may be more cost-effective. Investors should consider whether such purchases are truly in their best interests, and not solely in the interests of their stockbroker or financial advisor, who likely benefit as a result of the high fees associated with this particular class of shares.
Investment fraud and misconduct involving mutual fund shares, which allow broker-advisors to collect higher fees, is unfortunately not uncommon. If you or someone you love have lost money as a result of broker misconduct or fraud involving mutual share funds, our nationally recognized team of investment loss attorneys at Meyer Wilson is available to help you explore your rights and available options.
Call (800) 738-1960 or contact us online to speak with an attorney.