February 27, 2014
Some lawyers just go through the motions. Some give you your money's worth. Sometimes you win despite your lawyer. Sometimes you lose even though your lawyer did a great job. Frankly, trials and life aren't all that different. In today's BrokeAndBroker Blog we consider a FINRA arbitration in which a registered person's lawyer certainly went the distance in asserting the bases for damages. This client got a couple of kitchen sinks tossed into his claim along with a whole lot of carefully thought-out arguments.
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in September 2011 and as amended thereafter, Claimant Bonelli asserted breach of contract, loss of commissions and compensations in connection with his recruitment and work conditions at Respondent Merrill Lynch Pierce Fenner & Smith, Inc., and, moreover, with that respondent's alleged retention of the Cooperativa de Seguros de Vida de Puerto Rico ("COSVI") account, which the FINRA Arbitration Decision characterizes as "a large account allegedly acquired and handled by Claimant prior to his departure." Claimant Bonelli sought:
• $23 Million in compensatory damages;
• pre-judgment interest at the maximum legal rate;
• compensation for loss of
o commissions of "Commodities and Futures" accounts;
o upfront contingent award damages;
o negotiating and advance against future commissions;
o commissions generated by the COSVI account; and
o Claimant's 2011-2015 bonuses
• redress of the correct amounts established by the 2011 MLPFS/US Trust Client Solicitation and Transfer Policy for the alleged violations;
• breach of contract damages on the promissory note;
• goodwill damages;
• punitive damages;
• damages due to pain and suffering;
• emotional damages;
• costs; and
• attorneys' fees.
In the Matter of the FINRA Arbitration Between Alejandro Quilez Bonelli, Claimant, vs. Merrill Lynch Pierce Fenner & Smith. Inc., Herrans and Partners Advisory Group, Juan Guillermo Herrans, Jose Alberto Casellas, Hector J. Gonzalez, Andres Lewowicz, Richard Reiss, Hector Ruben Rosario, and Ricardo J . Vazquez, Respondents (FINRA Arbitration11-03843, February 13, 2014).
Respondents generally denied the allegations and asserted various affirmative defenses.
FINRA non-member Herrans and Partners Advisory Group did not voluntarily submit to the jurisdiction of FINRA Dispute Resolution, and, accordingly, the FINRA Arbitration Panel made no determination with respect to that entity.
The FINRA Arbitration Panel found Respondent Merrill Lynch liable and ordered it to pay to Claimant Bonelli $75,000.00 in compensatory damages.
Bill Singer's Comment
There's not much meat on the bones here when it comes to the arbitration Decision, which fails to offer us any substantive explanation about the nature of the dispute. About all that we know is that we're dealing with some kind of employment dispute involving Claimant Bonelli's complaint about the wrongful retention by his former employer of what would likely be called a crown-jewel account. Claimant Bonelli wanted a hefty amount of compensatory damages replete with interest from respondents -- and his lawyer truly tried to wring out of the sponge every drop of damages, interest, costs, and fees. My hat's off to Claimant's legal counsel for demanding a comprehensive range of damages and remedies.
How do we reconcile the FINRA Arbitration Panel's award of only $75,000 in compensatory damages versus the $23 Million-plus sought? Hey, what can I say? We just don't have enough background in the FINRA Arbitration Decision. Given the humongous demand for damages, it's likely that this was one of those cases that just wasn't going to settle. Respondents may well have deemed their exposure capped at under a $100,000 and figured that they might as well let an arbitration panel takes its time and issue its award. On the other hand, Claimant may have wanted his "day in court," as we lawyers often hear from clients who are fueled on moral outrage. As such, I leave it to you to decide who won and who lost this case.
For those of you contemplating similar litigation against an employer (or trying to anticipate items to be included in an employment agreement), you would be well served to carefully review Claimant's demands.