Investment giant settles for $26 million over excessive churning

Harmed investor reportedly a former state governor, advisor also accused of overcharging commissions

Investment giant settles for $26 million over excessive churning

Regulators in New Hampshire, U.S. have reached a $26 million settlement with Merrill Lynch over allegations it failed to stop churning and other infractions by one of its former financial advisors.

Merrill was ordered to pay a fine of $1.75 million and costs of $250,000 over its alleged failure to supervise Charles Kenahan, who churned stocks and initial public offerings, overcharged commissions, traded without authorization, inappropriately traded inverse and leveraged products and mismarked trade confirmations, the regulator claims.

According to a report by, the largest part of the settlement, $24.25 million, is what Merrill must pay in restitution to an investor the board identifies as being a Rye, N.H.-based high-net-worth client of Merrill and Kenahan.

The harmed investor in the case is Craig Benson, New Hampshire’s governor from 2003 to 2005, CNBC reported. Benson’s lawyer declined comment to the news network, only saying “the parties of the settlement agreement cannot comment on the settlement.”