Ex-Merrill Lynch FA Suspended Over Alleged Kiting Scheme
Finra has suspended a former Merrill Lynch broker for three months and fined him $5,000 for allegations over check kiting, according to a letter of acceptance, waiver and consent (AWC) published by the industry’s self-regulator.
Fuad Habba, who has been in the industry since 2004, worked at Merrill from 2012 until April 2016, Finra says. The AWC alleged that from January to March 2016, Habba wrote and deposited five checks totaling $2,765 from bank accounts that had been closed for several years. However, Habba was not found responsible or guilty by Finra of check kiting.
Finra alleged that Merrill first accepted the checks and credited his account but eventually rejected them. But Habba had apparently withdrawn funds from his own Merrill checking account after each of the deposits, according to the letter of consent. In effect, by withdrawing funds that would not have been available without the bad checks deposited into the account, Habba received unauthorized loans from Merrill Lynch, thus engaging in check-kiting, Finra alleged.
Habba had apparently resigned from Merrill, a unit of Bank of America, prior to any official allegations.
Editor's note: This article has been amended to reflect that Habba resigned from Merrill Lynch prior to any official allegations and was not found responsible or guilty for check kiting.