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FINRA Panel Hits Merrill With $10 Million Award

A Boca Raton, Florida Financial Industry Regulatory Authority (“FINRA”) Arbitration Panel has rendered a large award in favor of two former Merrill Lynch, Pierce, Fenner & Smith (“Merrill”) brokers. The FINRA claim filed by the former brokers, Tamara Smolchek and Meri Ramazio, alleged breach of contract, defamation and unfair competition, among other things, and sought damages in connection with the termination of their employment with Merrill when it was acquired by Bank of America.

In the Award, the Arbitration Panel found Merrill liable for breach of contract, breach of fiduciary duty, breach of duty of good faith and fair dealing, unjust enrichment, unfair competition, tortious interference with advantageous business relations, defamation, fraud and negligence. The Panel awarded Smolchek $4,275,000 and Ramazio $875,000 for unpaid compensation and damages caused by Merrill. According to the Award, the Panel specifically found there was clear and convincing evidence that Merrill and several members of its senior management were engaged in a deliberate fraudulent scheme to deprive departing brokers of their rights and benefits under the deferred compensation programs. The Panel also awarded punitive damages of $3,500,000 in favor of Smolchek and $1,500,000 in favor of Ramazio.

Within hours of the Award’s issuance, Merrill Lynch filed a petition to vacate the award alleging that the FINRA Panel Chairperson, Bonnie Pearce, had failed to disclose that her husband was a plaintiff’s attorney who had sued Merrill on behalf of brokers and customers on numerous occasions. Merrill also alleged that Ms. Pearce showed overt hostility toward Merrill during the FINRA arbitration.

The Florida securities lawyers at McCabe Rabin, P.A. represent investors nationwide in FINRA arbitration matters. Investors nationwide who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to kelly@mccaberabin.com

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