Ex-BOA broker files whistleblower suitSARASOTA -- A former stockbroker with Bank of America Corp. has filed a federal complaint alleging its Sarasota brokerage office is a "rogue" operation that fleeces customers.
David M. Willms contends that he was forced to resign last year because he complained to superiors about the illegal actions of other brokers in the office.
Willms, through Sarasota attorney James D. Keeney, filed an unusual complaint under the Sarbanes-Oxley Act, the 2002 law designed to punish corporate fraud.
The complaint was filed with the Occupational Safety and Health Administration, the federal agency that handles whistleblower issues invoking Sarbanes-Oxley.
Willms, who was with Banc of America Investment Services for more than 12 years, describes an office where young brokers earn hefty commissions by selling customers inappropriate investments.
Willms said his supervisors ignored him when he pointed out transactions that violated federal securities laws.
"Mr. Willms was reporting, in effect, that Banc of America Investment Services was operating a 'rogue office' in Sarasota," Keeney states in the complaint.
Shirley Norton, a spokeswoman with Bank of America, said the company took the allegations "very seriously and launched an extensive investigation.
"Our investigation found that the allegations lacked merit and factual foundation," she said.
Willms, who at one time was the assistant market president of the Sarasota office, cites several instances where he believes customers were wronged.
In one, a financial adviser representing a couple buying $1.1 million worth of mutual funds needlessly split the sale into 12 funds of six families. By doing so, the adviser boosted his commission from $10,000 to $40,000.
In another, an older couple was sold a $1 million variable annuity, a product that securities regulators have warned is often unsuitable for senior investors. Willms said he refused as supervisor to sign off on the transaction, but the broker sent it through anyway, and the office manager back-dated paperwork to approve it.
The broker earned a $40,000 commission and the firm an extra $20,000.
In an example Willms calls "double-dipping," a broker sold an 87-year-old woman corporate bonds worth $725,000. After pocketing a $15,600 commission, the broker then put the bonds in a managed account where he also would receive a quarterly percentage fee.
Norton of Bank of America said she could not discuss the allegations involving individual clients, but said all trades are appropriately reviewed.
Willms contends Banc of America's management retaliated against him when it came time to distribute the accounts of a senior adviser who left the firm. The most valuable accounts were parceled to the younger advisers, while Willms says he was left with the "problem" accounts.
He and another broker filed age discrimination complaints against Bank of America last year. Both were soon placed on probation, and in December Willms says he was given a "resign or be fired" ultimatum.
Willms, 51, is still unemployed and looking for work, Keeney said.
Last modified: June 01. 2006 5:14AM |
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