{"id":147680,"date":"2025-01-26T16:58:59","date_gmt":"2025-01-26T14:58:59","guid":{"rendered":"https:\/\/cryptodnes.bg\/en\/?p=147680"},"modified":"2025-01-26T16:58:59","modified_gmt":"2025-01-26T14:58:59","slug":"wall-street-giants-hit-with-60-million-fine","status":"publish","type":"post","link":"https:\/\/cryptodnes.bg\/en\/wall-street-giants-hit-with-60-million-fine\/","title":{"rendered":"Wall Street Giants Hit with $60 Million Fine"},"content":{"rendered":"

The SEC claims<\/a> <\/strong>that both firms failed to develop proper written procedures for their bank deposit sweep programs (BDSPs), a tool typically used by financial advisors to invest clients\u2019 unutilized cash. These programs are meant to generate interest on idle funds, providing an alternative to holding cash in non-interest-bearing accounts.<\/p>\n

However, according to the SEC, Wells Fargo and Merrill Lynch only offered low-yield options to clients, even as the Federal Reserve raised interest rates, creating a significant yield disparity.<\/p>\n

During periods of interest rate hikes, the interest earned from these BDSPs fell far below what clients could have received from other options. The SEC\u2019s investigation also revealed that both firms benefitted from this disparity by keeping returns artificially low. In total, the yield gap between BDSPs and other alternatives reached almost 4%, severely disadvantaging clients.<\/p>\n