As securities arbitration attorneys advocating for investors against brokerage firms like Merrill Lynch, we frequently encounter cases where brokers breach their duty to act in their clients’ best interests. One such case involves William Worthen King, a former Merrill Lynch broker who was recently sanctioned by FINRA and allowed to resign amid allegations of misconduct. His story highlights the risks investors face and the critical need for accountability in the financial industry. Let’s dive into the details of King’s regulatory troubles, analyze his alarming history of customer disputes, and explore what this means for investors seeking justice.
William King’s FINRA Sanction: A Closer Look
The Financial Industry Regulatory Authority (“FINRA”) has suspended former Merrill Lynch broker William King (CRD No. 1432593) for 30 days and assessed a $5,000 monetary fine. According to FINRA Letter of Acceptance, Waiver, and Consent No. 222077401201, between January 6, 2021, and January 5, 2023, William King exercised discretion over 204 trades across the accounts of four Merrill Lynch customers without prior written authorization. This conduct violated FINRA Rule 3260(b), which prohibits discretionary trading without explicit client consent, and Rule 2010, which mandates high standards of commercial honor.
FINRA and Mr. King entered into a Letter of Acceptance, Waiver, and Consent on March 3, 2025.
Unauthorized trading often occurs in non-discretionary accounts, where a customer retains discretion. In non-discretionary accounts, brokers must obtain a customer’s permission every time before placing a trade.
Unauthorized trading is an unethical and illegal practice. It is also a violation of securities rules and regulations and can cause enormous harm to customers.
Merrill Lynch terminated Mr. King in April 2026 following allegations of unsuitable and unauthorized trading. This came after he managed a reported $1.4 billion in client assets, raising questions about the firm’s oversight of such a high-profile broker.
A Troubling Pattern: Analyzing King’s Customer Disputes
A review of King’s FINRA BrokerCheck report reveals a staggering 29 customer disputes over his 30-year career, with 24 filed since 2022 alone. This surge in complaints coincides with his final years at Merrill Lynch and paints a troubling picture of systemic issues. Let’s break down the disputes and their outcomes:
- Total Disputes: Mr. King has been the subject of 29 customer complaints, with 24 initiated between 2022 and March 2025 (current date). These recent cases likely stem from the same period of unauthorized and unsuitable trading flagged by Merrill Lynch and FINRA.
- Settled Cases: 13 of the customer disputes have resulted in monetary settlements.
- Pending Cases: 1 dispute remains pending, where a customer has alleged an unsuitable investment strategy, unauthorized trading, misrepresentation, omission of material facts, and that the Financial Advisor was not acting in their best interest in 2020.
- Denied/Closed Without Action: 10 cases were denied or closed, often with no payout. Most of these complaints were direct written and verbal complaints made to Merrill Lynch, and no legal action was taken. These individuals may still be able to pursue recovery and should consult with an attorney.
Analysis of Settlements vs. Damages: In the settled cases with disclosed amounts, investors recovered an average of 28% to 30% of their requested damages. For example, the following settlements have been disclosed:
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- May 2023: Claimed damages of $300,000; settled for $85,000 (28% of requested).
- August 2022: Claimed damages of $500,000; settled for $150,000 (30% of requested).
- October 2022: Claimed damages of $1,000,000; settled for $275,000 (27.5% of requested).
What Went Wrong? The Role of Brokerage Oversight
King’s case raises red flags about Merrill Lynch’s supervision. How could a broker with a $1.4 billion book engage in 204 unauthorized trades across multiple accounts without detection? FINRA Rule 3110 requires firms to establish robust supervisory systems, yet King’s actions slipped through the cracks for two years. His resignation—framed as “voluntary” but tied to serious allegations—further suggests a pattern of firms distancing themselves from liability rather than addressing root causes.
The sheer volume of customer disputes since 2022 (24 in three years) is extraordinary, even for a seasoned broker. Compare this to the industry average: studies suggest only about 7-8% of brokers have misconduct disclosures over their careers. King’s record far exceeds this, signaling a chronic issue that Merrill Lynch arguably failed to curb.
Investor Takeaways: Protecting Your Portfolio
King’s case is a wake-up call for investors. Here’s how you can safeguard your financial future:
- Vet Your Broker: Use FINRA’s BrokerCheck to review a broker’s history. King’s 29 disputes were public knowledge—red flags that savvy investors could have spotted.
- Monitor Your Accounts: Unauthorized trading, like King’s 204 trades, often goes unnoticed without regular scrutiny. Demand written authorization for discretionary actions.
- Know Your Rights: If you suspect misconduct, FINRA arbitration can recover losses from brokers and firms. Claims may include negligent supervision against firms like Merrill Lynch for failing to oversee their advisors.
- Seek Legal Help: A securities arbitration attorney can analyze your case, quantify losses, and pursue maximum recovery—especially when settlements fall short, as seen in King’s disputes.
Holding Firms Accountable
Merrill Lynch’s role cannot be overlooked. Firms have a legal duty to supervise brokers and protect clients from harm. When they falter, investors can pursue claims for damages caused by inadequate oversight. King’s $5,000 fine and 30-day suspension may deter individual misconduct, but they do little to address systemic failures or compensate victims. Arbitration offers a path to hold both brokers and firms accountable, potentially yielding awards far exceeding FINRA’s sanctions.
Act Now: Don’t Let Misconduct Cost You
William King’s story—of unauthorized trades, a flood of customer disputes, and a quiet exit from Merrill Lynch—illustrates the risks of unchecked broker behavior. If you’ve worked with King or another advisor whose actions mirror this pattern, you may have a claim. At Iorio Altamirano LLP, we specialize in FINRA arbitration, fighting for investors against firms like Merrill Lynch. With 24 of King’s disputes arising since 2022 and settlements averaging just 28-30% of claimed damages, the need for skilled representation is clear.
Contact us today for a free consultation. Visit our website or call (855) 430-4010 to discuss how we can help you recover losses from broker misconduct. Don’t let your investments become another statistic—let us fight for the justice you deserve.