WASHINGTON: US market regulators on Thursday censured a Merrill Lynch brokerage unit, charging the company with selling the unregistered shares of a Chinese business software firm accused of falsifying its accounts.

Merrill Lynch, Pierce, Fenner & Smith Inc, a unit of Bank of America, neither admitted nor denied the allegations but agreed to pay a $1.25 million fine and to return $154,000 in disgorgement of revenues and interest, according to the US Securities and Exchange Commission.

"A broker-dealer has a duty to conduct a reasonable inquiry and know its customers before effecting unregistered sales of securities," Antonia Chion, associate director of the SEC's enforcement division, said in a statement.-AFP