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Arbitrators Order Merrill Lynch to Pay Investor $1.5 Million in Punitive Damages
An investor alleged that Merrill Lynch recommended unsuitable investments and made excessive trades in her brokerage account.
While an arbitration panel already had awarded $500,000 in compensatory damages, ten years ago, the parties began a protracted court battle over the issue of whether investors can recover punitive damages in arbitration.
That issue now is resolved, firmly in favor of the investor's right to recover punitive damages. In 1998, both Merrill Lynch and Bear Stearns were fined and censured by the National Association of Securities Dealers (NASD) for continuing to contest the issue before panels of arbitrators. Likewise, Merrill lost its court challenges with this investor, clearing the way for the arbitrators to assess punitive damages.
Source: Wall Street Journal, May 31, 2001
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Sponsored by James J. Eccleston, an attorney representing stockbrokers, financial planners and
investors nationwide in arbitration, litigation and regulatory matters, and a shareholder with the law firm
Shaheen, Novoselsky, Staat, Filipowski & Eccleston
P.C.(www.snsfe-law.com). This Web site contains material
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Always consult an attorney and/or investment advisor when building and protecting your wealth.
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