Lawrence Merl, a former stockbroker with David Lerner Associates Inc. in White Plains, New York, has been sanctioned by Financial Industry Regulatory Authority (FINRA) for making unsuitable investment recommendations to senior customers. Letter of Acceptance, Waiver, and Consent (AWC) No. 2019063686208.
According to the AWC, between February 2015 and October 2017, Merl advised four retired households, who sought low-risk investments, to invest in high-risk limited partnerships intended for acquiring and developing oil and gas properties. These investments were speculative, illiquid, and long-term, as described in the prospectuses. Despite the customers’ objectives, Merl recommended these products, earning $153,475.73 in commissions.
For example, in April 2017, Merl advised a 76-year-old retiree to invest $984,600 into one of these limited partnerships. This recommendation did not align with the retiree’s need for low-risk investments and steady income. FINRA found that Merl violated Rules 2111 and 2010 by failing to ensure that his recommendations matched the financial needs of his customers.
Without admitting or denying the findings, Merl accepted the following sanctions: a six-month suspension from associating with any FINRA member in all capacities, effective October 21, 2024, through April 20, 2025; a $10,000 fine; and the disgorgement of $153,475.73 in commissions, plus interest.
Merl is also associated with a pending customer initiated, investment related FINRA securities arbitration claim filed November 15, 2021 (FINRA Arbitration No. 21-02779). The customer alleges unsuitability and omissions concerning Energy 11 private placements, with requested damages of $100,000.
Merl was employed at David Lerner Associates Inc. from March 11, 1994, until his termination on November 4, 2022.
