Blake Scherr: Merrill Lynch Advisor Faces $1.5 Million Unauthorized Trading Claim

Vienna, VA | January 13, 2026

Virginia financial advisor Blake Scherr (CRD# 5043294) is defending himself against a customer complaint alleging improper solicitation and unauthorized trading involving $1,565,000 in claimed damages. The written complaint, filed on September 12, 2025, has evolved into a formal FINRA arbitration case, with Scherr named as a party in the proceedings.

According to FINRA BrokerCheck records, the client alleges that Scherr engaged in “improper solicitation and unauthorized trading of an account” involving mutual fund transactions. The case—FINRA arbitration number 25-01956—was served on November 18, 2025, and remains pending. Scherr has been with Merrill Lynch, Pierce, Fenner & Smith since January 2018 and currently serves as a Financial Advisor and General Securities Sales Supervisor at the firm’s Vienna, Virginia location.

The magnitude of the alleged damages—exceeding $1.5 million—combined with allegations of unauthorized trading represents one of the most serious types of customer complaints in the securities industry. Unauthorized trading strikes at the heart of the trust relationship between investors and their financial advisors, potentially constituting broker misconduct that can result in significant liability.

BrokerCheck Snapshot

Name: Blake Scherr
CRD #: 5043294
Firm: Merrill Lynch, Pierce, Fenner & Smith Incorporated
Location: Vienna, VA
Years in Industry: 8
Number of Disclosures: 1

The Allegations: $1.5 Million in Unauthorized Trading Claims

The complaint against Scherr involves two distinct but related allegations:

1. Improper solicitation – Inappropriate methods of obtaining business or making recommendations
2. Unauthorized trading – Executing transactions without proper client authorization

FINRA Case #: 25-01956
Date Complaint Received: September 12, 2025
Date Notice Served: November 18, 2025
Product Type: Mutual Fund
Alleged Damages: $1,565,000
Status: Pending FINRA Arbitration

The complaint was initially filed as a written customer complaint on September 12, 2025, but evolved into formal FINRA arbitration proceedings by November 18, 2025. Scherr is specifically named as a party in the arbitration, meaning he will be directly involved in the proceedings and potentially personally liable for any resulting award.

Understanding Unauthorized Trading

Unauthorized trading is one of the most serious violations in the securities industry. It occurs when a broker executes transactions in a client’s account without proper authorization. This can take several forms:

Types of Unauthorized Trading

1. Trading without any authorization – Executing buy or sell orders the client never approved
2. Exceeding discretionary authority – Making trades outside the scope of written discretionary authorization
3. Trading after authorization expires – Continuing to trade after discretionary authority is revoked or expires
4. Unauthorized account changes – Changing investment allocations, risk profiles, or account types without permission
5. Ignoring client instructions – Trading contrary to specific client directions or restrictions

Why Unauthorized Trading Is So Serious

Unauthorized trading represents a fundamental breach of the broker-client relationship because it:

• Violates the client’s right to control their own investments
• Can expose clients to unwanted risk and losses
• Often generates commissions for the broker at the client’s expense
• Undermines the trust essential to the financial advisory relationship
• Violates FINRA rules, SEC regulations, and state securities laws

Even when unauthorized trades result in profits, they remain violations because the broker exceeded their authority and deprived the client of control over their own assets.

The “Improper Solicitation” Allegation

The complaint also alleges “improper solicitation,” which can encompass various problematic practices:

Common Forms of Improper Solicitation

• High-pressure sales tactics – Pushing clients to make investment decisions before they’re ready
• Misrepresentation of risks or returns – Overstating potential gains or understating risks
• Churning – Excessive trading to generate commissions
• Unsuitable recommendations – Recommending investments inappropriate for the client’s situation
• Failure to disclose conflicts of interest – Not revealing how the broker benefits from recommendations
• Elder financial abuse – Taking advantage of elderly or vulnerable clients

When combined with unauthorized trading allegations, improper solicitation often suggests a pattern of aggressive or deceptive sales practices designed to generate transactions and commissions without proper regard for client interests or authorization.

The Size of the Claim: Over $1.5 Million

The alleged damages of $1,565,000 make this one of the larger individual broker complaints in recent FINRA records. Claims of this magnitude typically indicate:

Possible Scenarios for Such Large Losses

1. Substantial account size – The client had significant assets under management
2. Multiple unauthorized transactions – A pattern of trading over time, not a single incident
3. Concentration or leverage – Risky positioning that amplified losses
4. Market decline – Unauthorized positions that lost value during market volatility
5. Liquidation of suitable holdings – Selling appropriate investments to fund unsuitable ones
6. Opportunity costs – Losses from being out of the market or in wrong positions

The fact that the product type is listed as “Mutual Fund” is notable. Mutual funds are generally considered more conservative than individual stocks or options. However, significant losses can still occur through:

• Sector-specific funds (technology, energy, emerging markets)
• Leveraged or inverse ETFs
• High-turnover or concentrated strategies
• Inappropriate switches between fund families (generating new sales charges)
• Market timing strategies that backfire

Blake Scherr’s Background and Career Trajectory

According to FINRA records, Blake Scherr has been in the securities industry since 2018, spending his entire registered career with Merrill Lynch:

Current Position:

• Merrill Lynch, Pierce, Fenner & Smith (January 2018 – Present) – Financial Advisor in Vienna, VA
• Bank of America, N.A. (April 2018 – Present) – Financial Advisor in Vienna, VA

Previous Non-Securities Experience:

• Frontpoint (October 2012 – July 2017) – Financial Advisor/Business Development Manager
• Unemployed (July 2017 – November 2017)

Securities Licenses and Qualifications:

General Securities:

• General Securities Representative (Series 7) – passed January 2018
• Securities Industry Essentials (SIE) – passed October 2018
• Uniform Combined State Law (Series 66) – passed March 2018

Supervisory:

• General Securities Sales Supervisor – General Module (Series 10) – passed September 2023
• General Securities Sales Supervisor – Options Module (Series 9) – passed April 2023

Scherr is licensed in an impressive 53 U.S. states and territories and holds supervisory registrations, indicating he has risen to a leadership position within Merrill Lynch. His Series 9 and 10 licenses qualify him to supervise other brokers, making his compliance record particularly important.

The Significance of Supervisory Status

The fact that Scherr holds Series 9 and 10 supervisory licenses—which he obtained in 2023—adds an additional layer of concern to the pending complaint:

Why Supervisory Status Matters

1. Higher standard of conduct – Supervisors are held to elevated compliance expectations
2. Responsibility for others – May oversee junior brokers who look to him for guidance
3. Firm confidence – Merrill Lynch promoted him to supervisory roles, indicating trust
4. Training and knowledge – Should have enhanced understanding of rules and regulations
5. Potential supervision failures – If he engaged in unauthorized trading, what oversight occurred?

Supervisors are expected to model proper conduct and ensure compliance. When supervisors themselves face allegations of unauthorized trading, it raises questions about:

• The adequacy of the firm’s supervision of supervisors
• Whether similar issues exist among advisors he supervises
• The firm’s internal controls and monitoring systems

Red Flags: What Unauthorized Trading Looks Like

The allegations against Scherr highlight warning signs that all investors should monitor in their accounts:

1. Unexplained Activity

• Trades appearing in statements that you don’t remember authorizing
• Purchases or sales of securities you never discussed with your advisor
• Account activity that doesn’t match your investment objectives or risk tolerance

2. Excessive Trading (Churning)

• Frequent buying and selling that generates commissions
• Turnover that seems inconsistent with a buy-and-hold strategy
• Short holding periods followed by immediate replacements

3. Changes Without Discussion

• Sudden shifts in account allocation
• Movement from conservative to aggressive investments
• Switches between mutual fund families (generating new sales charges)

4. Pressure to Sign Documents

• Requests to sign blank forms or agreements
• Pressure to provide blanket authorization
• Reluctance to explain what you’re signing

5. Defensive Responses to Questions

• Advisor becomes evasive when you ask about specific trades
• Difficulty getting clear answers about why transactions occurred
• Discouragement from reviewing statements carefully

6. Communication Breakdown

• Difficulty reaching your advisor
• Delayed responses to concerns about account activity
• Statements or confirmations that arrive late or irregularly

The Evolution from Complaint to Arbitration

The progression of Scherr’s case from written complaint to formal FINRA arbitration provides insight into how these matters develop:

September 12, 2025: Written complaint received
November 18, 2025: Notice/process served; case evolved to FINRA arbitration
FINRA Case #: 25-01956
Current Status: Pending

This two-month progression suggests:

• The client attempted resolution through the firm’s complaint process
• Resolution efforts were unsuccessful
• The client engaged legal counsel and filed formal arbitration
• The matter is now in formal dispute resolution proceedings

The fact that the complaint “evolved into arbitration” with Scherr named as a party indicates this is not simply a firm-level dispute but involves specific allegations against Scherr personally.

Can You Recover Losses from Unauthorized Trading?

If you experienced unauthorized trading, improper solicitation, or other forms of broker misconduct that resulted in losses, you may be entitled to recover your damages through FINRA arbitration.

Unauthorized trading cases may involve:

• Trades executed without your knowledge or consent
• Exceeding discretionary authority limits
• Trading contrary to your stated investment objectives
• Churning or excessive trading to generate commissions
• Unsuitable investment recommendations
• Failure to supervise by the firm

Patil Law, P.C. represents investors nationwide who have been harmed by unauthorized trading, broker misconduct, and securities fraud. We have over 15 years of experience in securities law and have recovered more than $25 million for clients across 1,000+ cases.

About FINRA Arbitration

FINRA arbitration is a streamlined dispute resolution process for securities-related claims. It offers a faster, more cost-effective alternative to traditional court litigation. Most cases are resolved within 12-16 months. Claims generally must be filed within six years of the incident.

Advantages of FINRA Arbitration

• Specialized expertise – Arbitrators understand securities industry practices and standards
• Comprehensive discovery – Investors can obtain account records, emails, and other evidence from the firm
• Faster resolution – Cases typically conclude in 12-16 months vs. years in court
• Lower costs – Less expensive than traditional litigation
• Binding awards – Decisions are enforceable in court
• Damages recovery – Can include losses, interest, attorney’s fees, and in some cases punitive damages

What to Expect in Arbitration

FINRA arbitration involves several stages:

1. Filing the Statement of Claim – Detailed allegations and damage calculations
2. Answer and Defenses – Firm and broker respond to allegations
3. Discovery – Exchange of documents and information
4. Hearings – Presentation of evidence and testimony
5. Award – Arbitrators’ binding decision

Our Experience with Unauthorized Trading Cases

Unauthorized trading cases require attorneys who understand both the legal standards and the technical aspects of trading authorization, account documentation, and supervision requirements. Attorney Chetan Patil and our legal team—including attorneys Gabriela Dubrocq and Patricia Herrera—focus exclusively on investor protection and securities law.

We handle cases involving:

• Unauthorized trading and discretionary authority violations
• Churning and excessive trading
• Unsuitable investment recommendations
• Improper solicitation and high-pressure sales tactics
• Breach of fiduciary duty
• Failure to supervise
• Mutual fund switching and unnecessary transactions

We work on a contingency fee basis, meaning you pay no attorney fees unless we recover money for you. Your consultation is completely free and confidential.

Merrill Lynch: Account Monitoring Is Essential

Investors with accounts at Merrill Lynch or any major brokerage firm should:

1. Review statements monthly – Check every transaction for accuracy and authorization
2. Understand your authorization – Know what discretionary authority, if any, you’ve granted
3. Document all communications – Keep records of discussions about investment decisions
4. Question unexpected activity – Don’t assume transactions were approved if you don’t remember them
5. Act quickly on concerns – Contact the firm’s compliance department immediately if you see unauthorized trades

Even at large, reputable firms like Merrill Lynch, individual brokers may engage in unauthorized trading or other misconduct. Firm size and reputation don’t eliminate the need for vigilant account monitoring.

Time Limits Apply

Securities claims must generally be filed within six years under FINRA rules. However, the calculation can be complex:

• The clock may start when the unauthorized trading occurred
• Or when you discovered (or should have discovered) the unauthorized activity
• Continuing violations may extend the limitations period
• Some states have different timeframes

If you invested with Blake Scherr or have concerns about unauthorized trading with any financial advisor, don’t assume your claim is too old without consulting an attorney. Time may be running out to protect your rights.

Related Brokers and Firms

If you’ve had concerns with advisors at similar firms or experienced comparable issues, you may want to review:

• Merrill Lynch Advisors – Complaints & Disclosures
• Unauthorized Trading Claims
• Broker Misconduct
• Unsuitable Investment Claims
• Failure to Supervise

Frequently Asked Questions

What is the complaint against Blake Scherr?

Blake Scherr faces a pending FINRA arbitration alleging improper solicitation and unauthorized trading involving mutual fund transactions. The complaint, filed in September 2025, seeks $1,565,000 in damages. The case (FINRA #25-01956) was served in November 2025 and remains pending, with Scherr named as a party in the arbitration proceedings.

Can investors recover losses involving Merrill Lynch?

Yes. Investors who suffered losses due to unauthorized trading, unsuitable investments, churning, or other forms of broker misconduct at Merrill Lynch or any other firm may be entitled to recover their losses through FINRA arbitration.

What does “unsuitable investment” mean?

An unsuitable investment is one that doesn’t align with an investor’s financial situation, investment objectives, risk tolerance, time horizon, or liquidity needs. Brokers and investment advisers have a duty to recommend only investments that are suitable for their clients based on these factors.

How do I look up a broker on BrokerCheck?

Visit FINRA’s BrokerCheck website at brokercheck.finra.org and search by the broker’s name or CRD number. BrokerCheck provides free access to employment history, registrations, qualifications, and disclosure events including customer complaints, regulatory actions, and employment terminations.

What should I do if I suspect broker misconduct?

First, gather all documentation related to your investments, including account statements, trade confirmations, and communications with your broker. File a written complaint with your brokerage firm’s compliance department. Then, consult with a securities attorney who can evaluate whether you have grounds for a FINRA arbitration claim. Time limits apply, so don’t delay seeking legal guidance.

About Patil Law, P.C.

Patil Law, P.C. is a securities litigation firm dedicated to representing investors who have suffered losses due to broker misconduct, unsuitable recommendations, and securities fraud. Founded in 2018 by attorney Chetan Patil, the firm focuses exclusively on FINRA arbitration and investment loss recovery.

With over 15 years of combined experience in securities law, Patil Law has successfully recovered more than $25 million for clients across 1,000+ cases. Attorney Chetan Patil earned his law degree from Case Western Reserve University School of Law. Attorneys Gabriela Dubrocq and Patricia Herrera earned their law degrees from University of Miami. The firm handles cases nationwide involving unauthorized trading, churning, unsuitable investments, breach of fiduciary duty, and failure to supervise.

Patil Law works on a contingency fee basis, meaning clients pay no attorney fees unless the firm successfully recovers money on their behalf. All consultations are free and confidential.

Contact Patil Law Today

If you experienced unauthorized trading, improper solicitation, or other issues with Blake Scherr or any other financial advisor, contact us today for a free, confidential consultation.

Call: 800-950-6553
Email: info@patillaw.com
Website: investmentlosslawyer.com

There is no cost and no obligation. We’re here to help.

Disclaimer: The information in this article is based on FINRA BrokerCheck records and public arbitration filings. The allegations described are pending and unproven. The matter may be resolved in favor of the broker or concluded through a negotiated settlement with no admission or finding of wrongdoing. All investors are entitled to fair treatment under securities laws. This is attorney advertising. Prior results do not guarantee a similar outcome. This communication is for informational purposes only and does not create an attorney-client relationship.