(May 16) – “Merrill Lynch & Co. agreed to pay a $750,000 fine to state securities regulators for alleged broker abuses that triggered investor claims of $30 million in losses from as many as 400 clients,” writes John Hechinger and Charles Gasparino in today’s Wall Street Journal.

“In a settlement with Massachusetts Securities Division, regulators alleged that Richard F. Greene – a 38-year Merrill veteran and one of its top-producing brokers – improperly put investors in little-known stocks that later plunged in value.

“Under securities rules, brokers must ensure that investments are suitable for clients and avoid overconcentration in a handful of risky investments. Merrill, the nation’s largest brokerage firm, neither admitted nor denied the allegations. The fine represented one of the largest a state has ever levied against a brokerage firm.

“The cases represented ‘a systemic lack of oversight’ by Merrill in the state, alleged Massachusetts Secretary of State William Francis Galvin, whose office oversees the securities division.

“Merrill said there was no systemic problem; it noted that the cases include a tiny fraction of its 450 Massachusetts brokers. Mr. Greene, 66 years old, couldn’t be reached for comment. He was widely admired in the Merrill sales force and sought after as a broker. Before he retired in December 1998, he had about $1.5 billion under management, 1,400 clients and five assistants, according to regulators. He generated about $10 million a year in commissions and earned nearly $4 million a year.

“Gerald Rath, Mr. Greene’s Boston attorney, says that until he left the firm, Mr. Greene hadn’t faced a single formal complaint in his 38 years at Merrill.

“Mr. Rath and a Merrill spokesman said analysts at the firm and other big securities houses had recommended the stocks that lost much of their value. These include nursing-home operator Genesis Health Ventures Inc., two real-estate investment trusts, Eldertrust Inc. and Indymac Mortgage Holdings Inc., and Orbital Sciences Corp., a spacecraft concern. Mr. Greene owned the stocks in his personal account while his clients did, according to people familiar with the matter.”