Merrill Lynch Wins Five-Year FINRA IRA Arbitration Saga

November 21, 2011

In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claimfiled in July 2006, Claimant Helly was the executor of the estate of Vera Freeberg, who prior to her death had established two IRA accounts with Respondent Merrill Lynch.  Claimant Helly alleged that in connection with those two IRA account, Respondent had

  • failed to pay costs and fees,
  • improperly distributed  funds, and
  • failed to issue 1099 forms upon distribution.

Accordingly, Claimant initially sought $104,534.00 in compensatory damages (reduced at the final hearing on October 12, 2011 to $87,165.00); $175,000.00 in punitive damages; interest, and costs. San Francisco Hospital for a serious condition."

PHC Reschedule #5

FINRA rescheduled the initial PHC to October 31, 2007.

Yeah, big surprise coming here

The FINRA Arbitration Decision informs us that on October 22, 2007, "FINRA attempted to send notification of the pre-hearing conference to Claimant's counsel via facsimile, however, the attempt failed." 

SIDE BAR: This is the second time that the Decision informs us of a failed attempt to send a notice in this arbitration, and it's also the second time that there is no explanation as to why the attempt failed.  Who's to blame for the failed attempt - Respondent or FINRA? 

On October 22, 2007, FINRA sent notice of the initial PHC to Claimant's Counsel Jacobus' email and postal addresses. 

On October 31, 2007, the conference call coordinator was unable to reach Jacobus.  Apparently believing that enough was enough, Respondent's counsel verbally requested that the FINRA Arbitration Panel consider dismissing the matter without prejudice. After due deliberation, the Panel dismissed the matter without prejudice.


Pursuant to it October 31, 2007  ruling, the Panel reiterated the tortured history of the efforts to schedule an initial PHC starting on January 24, 2007, and charged Claimant for the aborted October 31st PHC.

November 6th Decision

On November 6, 2007, the Panel dismissed Claimant's claims and referred to the parties to their "judicial remedies, or to any dispute resolution forum agreed to by the parties, without prejudice to any claims or defenses available to any party."

On December 10, 2007, Claimant filed a request to re-open the forum and to reschedule the hearing, which Respondent opposed. 

One More Chance

On March 7. 2008, the Panel issued an Order re-opening the forum, reaffirmed its November 6, 2007 Decision, and ruled that the Claimant's claims were not dismissed and remained subject to final determination of the Panel after a hearing on the merits.

The Panel and parties subsequently scheduled evidentiary hearings for October 11-13, 2011.  Following those hearings, the Panel denied Claimant's claims.

Can we finally stick a fork in this mess and say it's truly done?  I hope so.