The decision of the court in the matter comes after Merrill’s decision to settle a class action with 1,400 ex-brokers last month, for a proposed amount of $40 million. While that deal would primarily help lower-producing brokers, individual cases, like the present one on same or similar causes of action are continuing before FINRA arbitration panels.
In the instant case, two Florida brokers, Tamara Smolchek and Meri Ramazio were awarded $5.2 million towards compensation and another $5 million was made for punitive damages. A FINRA panel gave the ruling in early April.
As Michael Taffe, an attorney in Shumaker, Loop & Kendrick, who represented Smolchek and Ramazio says, “I think what this tell us is that brokers are better off bringing their actions before an arbitration panel than to settle for any class action settlement.” Shumaker, Loop & Kendrick is representing about 1,000 former Merrill brokers in such claims over deferred payments.
Merrill had essentially argued that the award did not have merit as the Chairwoman of the arbitration panel making the award did not disclose that she was married to a lawyer, who had represented clients against Merrill. The court failed to find any evidence of bias and reached the conclusion that Merrill “has not sufficiently demonstrated evident partiality on the part of the panel or that the panel engaged in misconduct or exceeded its powers.”
Apparently, the company is reviewing the decisions and its options, as reported by a Bank of America spokesperson.