Merrill Lynch has demoted a regional manager whose staff formerly included three brokers since fired over a mutual fund trading scandal.

Andy Williams, who had been regional managing director for northern New Jersey, was removed from his post last week, reports Dow Jones Newswires. A source said he has been given options for remaining with the company, including the choice of taking up a post as financial advisor.

Neither Williams nor Merrill Lynch commented for the story.

Williams managed the northern New Jersey region at the time Merrill hired "the CBS Group," three brokers that were fired in 2003 after regulators and Merrill Lynch itself alleged they had helped Millennium Partners, a hedge fund, to market time mutual fund trades. The practice is not strictly illegal, and the brokers have maintained that they were scapegoats in the case. The Wall Street Journal reported last month that Williams sought to allow continued market timing when the company's compliance officials raised objections.

Last December, the NYSE ordered Merrill to pay the CBS Group almost $15 million for defamation. Merrill has appealed this decision. Meanwhile, Merrill fined Williams and Curtis Brown, who was the brokers' immediate boss, a combined $250,000 after firing the brokers. That case is also awaiting appeal.

 

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