Merrill Lynch agreed Wednesday to pay $728,260 in civil penalties for allowing unregistered client associates to sell securities in states where they were not permitted to do business, said New Jersey’s Attorney General Paula Dow. Client associates served as sales assistants to one or more financial advisors.

Previously, Merrill Lynch was under a multi-state investigation, which started in 2008 and triggered the administrative consent order between New Jersey and the financial firm. The order states that the investigation revealed that from Jan. 1, 2004 through the present, Merrill Lynch allegedly had client associates who conducted sales of securities in states without being properly registered. The order further says that the New Jersey Bureau of Securities found that Merrill Lynch did not adequately supervise client associates and enforce its own established written procedures.

According to court documents, a Merrill Lynch review found that since June 30, 2008, the financial firm had 3,780 registered client associates. About 2,200 of them were only registered in their home state or their home state plus one additional state. The settlement mandates that the financial firm pay $728,260 and revise its business practices to be in compliance with New Jersey’s state laws and regulations under an administrative consent order.

“The Bureau of Securities has acted to protect investors and to ensure legal compliance by companies that operate in New Jersey," Dow said in a press release. "This settlement underscores how vital the work of state securities regulators is, especially during these difficult financial times." Dow confirmed that Merrill Lynch, which fully cooperated with the investigation, has already implemented a system to track and monitor the status of its employees who accept client orders.

In response to the settlement, a Merrill Lynch spokesperson said in a phone interview that this is a finalization of last September’s resolution of this matter. He declined to comment further.