Merrill Submits $40 Million Class-Action Settlement With Ex-Brokers

By Caitlin Nish and Corrie Driebusch - Dow Jones Newswires

NEW YORK--Merrill Lynch presented a proposed class-action settlement Friday that envisions paying about $40 million to some 1,500 of the company's former brokers.

The settlement was put before a federal judge in New York City and requires her approval. It would compensate the brokers for deferred pay that they were denied when they left Merrill in the wake of the firm's 2008 acquisition by Bank of America Corp. (BAC).

The brokers would receive between 40% and 60% of the value of their deferred plan accounts, depending on when they left Merrill and whether they made claims for their deferred compensation or initiated litigation or arbitration.

Both parties will need to submit a renewed proposal in court by Sept. 6.

The settlement applies only to those brokers who generated about $500,000 or less in annual fees and commissions. Brokers in that category are estimated to total about 1,500 and would be able to decide whether to be members of the class or to opt out and pursue their own individual claims in the Financial Industry Regulatory Authority's arbitration forum.

Another 1,500 brokers who were higher producers also the left the firm after the acquisition, and any claims by them wouldn't be covered by the settlement.

Brokers' contracts typically required them to remain employed for several years before they gained vested rights to their deferred compensation, which they could claim only in a shorter time frame if they left for good reason. At issue is whether Merrill Lynch's September 2008 sale to Bank of America, and the changes that accompanied that event, constituted a good reason.

In the class action, lawyers argued that a new pay scheme introduced after the acquisition reduced the pay of lower- producing brokers and gave them good reason to leave.

Merrill Lynch had multiple deferred-compensation programs. In documents filed in the class-action case, a Merrill Lynch human resources and compensation executive estimated the average amount each former broker had in one of the accounts was $36,000 and in another $16,000.

MSSB Retention Packages

LAW OFFICES OF DAVID HARRISON INVESTIGATES MORGAN STANLEY SMITH BARNEY'S TREATMENT OF FINANCIAL ADVISORS REGARDING RETENTION PACKAGES

Law Offices of David Harrison has initiated an investigation of Morgan Stanley Smith Barney ("MSSB") over its treatment of financial advisors regarding retention packages offered to them after Morgan Stanley purchased Smith Barney. This investigation stems from MSSB offering retention packages to financial advisors in 2008 and 2009 which called for a back-end payment in 2012. Financial advisors signed retention packages in the expectation that all terms would be met by MSSB. When 2012 arrived, financial advisors were stunned that MSSB took the position that the 2012 backend payment did not apply to them and declined to make any additional payments.

Morgan Stanley Smith Barney financial advisors may have rights to collect and be paid out their complete retention packages.

If you signed a MSSB retention package and you feel you were not treated properly and compensation is owed to you, contact our firm for an evaluation of your rights. You can contact David Harrison directly at (310) 499-4732 or by email at dshesq@gmail.com.

Merrill Lynch Deferred Compensation

LAW OFFICES OF DAVID HARRISON INVESTIGATES MERRILL LYNCH OVER FINANCIAL ADVISORS' DEFERRED COMPENSATION PROGRAM

Law Offices of David Harrison has initiated an investigation of Merrill Lynch ("Merrill") over its treatment of financial advisors regarding deferred compensation packages. Financial advisors who did not sign retention packages with Bank of America after the brokerage acquired Merrill Lynch in 2008 were shocked to learn that Merrill refused to pay financial advisors their deferred compensation plan. Many financial advisors left Merrill Lynch due to the uncertainty surrounding the Bank of America / Merrill merger believing a change of control in the company caused the deferred compensation to vest. A FINRA arbitration panel lambasted Merrill for running a "systemic fraudulent scheme to deprive claimants of their rights" under the deferred-compensation plans. The arbitration panel further said that the committee Merrill Lynch instituted to determine whether compensation programs vests was "a sham committee that did nothing more than rubber-stamp denials." According to the arbitration panel, Merrill has never approved a request for vesting despite the firm's own "numerous ... analyses and anticipated turnover projections that indicated anywhere from hundreds of millions to several billion dollars in potential liability."

Merrill Lynch financial advisors who did not sign Bank of America retention packages may have rights to collect their deferred compensation packages.

If you believel you were not treated properly and compensation is owed to you, contact our firm for an evaluation of your rights. You can contact David Harrison directly at (310) 499-4732 or by email at dshesq@gmail.com.