Monday, August 6, 2007

Merrill Broker Wins $1.6 Million in Defamation Suit

A NASD Arbitration Panel has awarded a Merrill Lynch broker $400,000 in compensatory damages plus $1.2 million in punitive damages for defamatory statements made by Merrill on the broker's U-5.

Registered Rep has a story on the award, which was decided under Florida law. As most of us are aware, the highest court in New York recently ruled that statements made on a U-5 are absolutely privileged, although brokers could still sue for expungement of defamatory comments.

New York law doesn't govern disputes arising in other states, as demonstrated by this award, and the $1.2 million in punitive damages, while unusual, demonstrates that arbitration panels will still protect brokers who are damaged by overzealous firms.

The award is online here, and more information is available at SECLaw.com
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