FINRA Suspends Former Merrill Lynch Employee For Not Reporting Crypto Mining Operation

News | June 14, 2019 By:

The US Financial Industry Regulatory Authority (FINRA) has fined and suspended an ex-Merrill Lynch banker for allegedly starting a crypto mining operation without informing his company.

According to the “letter of acceptance, waiver and consent,” the employee, Kyung Soo Kim, who served Merrill Lynch as a General Securities Representative and an Investment Company Variable Contracts Products Representative from March 2014 to April 2018, launched a crypto mining company, called S Corporation, in late 2017, just before bitcoin’s price peaked at around $20,000. Kim entered into a deal with another company to build and operate the mining hardware and software for the mining operations and paid the third party for its services.

FINRA said that Kim should have informed Merrill Lynch of the activities that he was engaging in. His failure to do so violated FINRA’s rules 3270 and 2010. Both policies require that businesses made outside the FINRA-registered employment to be declared in writing and the FINRA-associated persons should observe “high standards of commercial honor and just and equitable principles of trade.”

“Kim failed to provide written notice to Merrill of the above-described activity,” said FINRA. “By reason of the foregoing, Kim violated FINRA rules.”

Kim has been fined $5,000 for the infraction and suspended from working for any FINRA member entity in any capacity for one month.