| April 4
April 4 Bank of America's Merrill Lynch
must pay $10.2 million to two former brokers after a regulatory
panel ruled that the firm fraudulently denied the brokers'
The Financial Industry Regulatory Authority panel said that
the brokerage unit "intentionally, willfully and deliberately
breached its fiduciary duty" by depriving brokers Tamara
Smolchek and Meri Ramazio of their rights to collect money from
deferred compensation plans after Bank of America acquired
Merrill late in 2008.
"This decision is very atypical because most FINRA decisions
are light on the evidence and have very little analysis of the
case itself," said New Jersey-based industry lawyer Tom Lewis,
referring to the 16-page document outlining the arbitration
"This panel has gone well over what is normal and typical in
giving an explanation in how it justified this large decision,"
The panel broke down the award payments into compensatory
damages totaling $5.2 million, and punitive damages totaling $5
million. Compensatory damages included unpaid wages, unpaid
deferred compensation, lost wages, lost book, value of business
Under the terms of several of Merrill's deferred
compensation programs, brokers who left the firm with "good
reason," would have vesting rights to money amassed in their
Many of the more than 3,000 financial advisers who left the
brokerage after the acquisition are seeking compensation they
say was wrongly denied. The panel said it was "shocked" that not
one of those claims has been approved for vesting.
"There was no credible documentation of any protocol for
making decisions, reasons for decisions, guidelines for
determining approval/denial, or any evidence that any
investigation was conducted for the Claimants' claims," the
panel said in the arbitration document released on Wednesday.
Bank of America spokesman Bill Halldin said the firm has
asked a federal court to overturn the award.
"The amount of the award bears no relation to the damages at
issue," Halldin said.
The brokers' attorney, Michael Taaffe of Florida-based
Shumaker, Loop & Kendrick, called the ruling "a well-reasoned