A U.S. district court decided yesterday that Merrill Lynch, now a part of Bank of America Corp., will have to pay $10.2 million in unpaid deferred compensation to two of its former brokers.
Merrill Lynch had asked the court to vacate the previous April ruling by the Wall Street self-regulator Financial Industry Regulatory Authority panel. The suit dates back to 2008, when several of the brokers who left Merrill Lynch after BofA purchased it said that the acquisition was “good reason” for them to collect those payments.
This case was one of the largest among the several deferred compensation cases former brokers brought against Merrill Lynch after its sale to BofA. The $10.2 million award to Tamara Smolchek and Meri Ramazio includes $5.2 million in compensatory damages and $5 million in punitive damages.
Merrill Lynch and BofA have had their share of legal troubles of late. In August, the company was hit with a $40 million verdict in another deferred compensation case—that one was a class action suit brought by 1,400 former brokers. And last week, Merrill Lynch caught a slight break when the 7th Circuit rejected a racial bias suit that black financial advisers who worked at Merrill Lynch & Co. filed over retention bonuses.