BofA could pay millions to ex-Merrill Lynch brokers: WSJ

Thu May 3, 2012 10:32pm EDT

An ATM machine at a Bank of America office is pictured in Burbank, California. REUTERS/Fred Prouser

An ATM machine at a Bank of America office is pictured in Burbank, California.

Credit: Reuters/Fred Prouser

(Reuters) - The Wall Street Journal said Bank of America Corp could end up paying hundreds of millions of dollars in a settlement following talks with lawyers representing more than 1,000 former Merrill Lynch & Co brokers, who left the brokerage firm after BofA acquired it in 2009.

The brokers claim they are owed deferred compensation as a result of the deal. The paper said an arbitration ruling ordering the Charlotte, North Carolina-based bank to pay more than $11 million to two former brokers with related complaints had boosted their claims.

People with knowledge of the matter said that the claims total hundreds of millions of dollars, noting that the settlement talks were at a preliminary stage.

More than 100 of the former BofA brokers alleged in their arbitration proceedings that BofA planned to cheat them of deferred compensation worth between tens of thousands and several million dollars, the Journal said.

BofA spokesman Bill Halldin said in an emailed statement:

"We believe these claims are without merit and are continuing to defend against these claims.‪

"Financial advisors who received stock awards understood that they would forfeit any unvested stock if they decided to leave the firm, like other employees who voluntarily terminate their employment. Merrill Lynch's acquisition by Bank of America alone didn't trigger any change to that as an acquisition by itself does not provide any basis for these type of claims.‪"

(Reporting by Sunayan Bhattacharjee in Bangalore: Editing by Eric Meijer)