By Matthias Rieker 

The Financial Regulatory Authority, Wall Street's self-regulator, fined Bank of America Corp.'s Merrill Lynch, saying the brokerage took a year to report allegations that one of its financial advisers was siphoning money from client accounts.

Finra fined Merrill $175,000, saying an initial Oct. 26, 2011, customer complaint against the adviser, Greg Campbell of Clayton, Mo., and a similar complaint from May 25, 2012, weren't reported to the regulator until Oct. 26, 2012. Both customers accused Mr. Campbell of withdrawing money from their accounts and other misdeeds.

While the complaint went unreported to Finra, Mr. Campbell left Merrill Lynch on Oct. 29, 2011, and joined an LPL Financial Holdings Inc.-affiliated firm a short time later, Finra said. According to authorities, at his new firm, Mr. Campbell continued to steal money from customers; in all, Mr. Campbell misappropriated more than $1.7 million from customers at Merrill Lynch and more than $500,000 from clients at the LPL-affiliated firm, Finra said.

Mr. Campbell was fired from the LPL-affiliated firm after Merrill Lynch disclosed the complaints.

Mr. Campbell pleaded guilty to federal wire fraud charges in 2013 and was sentenced to 38 months in prison. He had set up credit lines secured by clients' securities portfolios, mostly without their knowledge, and taken money to pay his mortgage, car loan and other expenses, according to Finra documents. His victims included relatives and an 85-year-old client with dementia, according to Finra.

Asked to comment on the fine, a Merrill Lynch spokesman said, "When we became aware in 2012 that two client complaints had not been reported in a timely manner, we took appropriate disciplinary action." The clients were reimbursed for all stolen funds, according to Finra documents.

A spokesman for LPL said the firm reimbursed its clients. He declined further comment.

Firms are obligated to report customer complaints against their brokers to Finra within 30 days and the regulator posts them on the publicly available BrokerCheck site.

Finra said it had noticed an increase in such reporting failures across the industry. It said it had brought 138 cases by the end of November 2014 against firms for failing to update brokers' public records, up from 103 such cases for the full year 2013.

Last week, the regulator said, in its annual examination priority letter, it is making changes to its registration review process to address the issue. "This includes a public records review of all active registered persons," Finra said.

Write to Matthias Rieker at matthias.rieker@wsj.com

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