An irreverent Wall Street Blog
by Bill Singer
by Bill Singer
Former Merrill Lynch Employee Files $3.8 Million Wrongful Termination Case
June 6, 2013
Was this arbitration started as a legal maneuver to preempt a former employer's filing of an arbitration to recover on a promissory note balance? Or was the claimant outraged at the circumstances of his employment and hoped to prevail on his causes of action? We may never have the answers to those questions but this case prompts us to wonder what was going on behind the scenes.
In a Financial Industry Regulatory Authority ("FINRA") Arbitration Statement of Claim filed in October 2009 and amended thereafter in January 2010 and February 2010, associated person Claimant Gomez asserted causes of action including employment discrimination, wrongful termination; breach of contract; libel; failure to supervise; and intentional and negligent interference with prospective economic relations as a result of the termination of his employment by Respondent Merrill Lynch, Pierce, Fenner & Smith Incorporated. In his amended Statements of Claim, Claimant withdrew his discrimination claims. Gomez sought general damages of not less than $1 million, actual damages in excess of $3,842,214; attorneys' fees; costs, and expungement of his Form U5. In the Matter of the FINRA Arbitration Between Paul G. Gomez, Claimant, vs. Merrill Lynch, Pierce, Fenner & Smith Incorporated; Merrill Lynch International Finance; Bank of America Corporation; and Merrill Lynch & Co., Inc., Respondents - AND- Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch International Finance, Counter Claimants, v. Paul G. Gomez, Counter-Respondent (FINRA Arbitration 09-05899, June 3, 2013).
Respondents generally denied the allegations, asserted various affirmative defenses, and filed a Counterclaim asserting breach of contract and unjust enrichment pertaining to an alleged balance owed on a Promissory Note executed by Gomez on January 7, 2009. In their Counterclaim, the Merrill Lynch Respondents requested the principal balance due on the Promissory Note of $1,162,790.76 plus 3% per annum interest from July 24, 2009 until paid ($96.90 per day); and attorneys' fees.
Not Part Of This Equation
Because Respondents Bank of America Corporation and Merrill Lynch & Co., Inc. are not FINRA member firms and did not voluntarily submit to arbitration, the FINRA Arbitration Panel made no determination with respect to Gomez's claims against those two respondents.
Award
The FINRA Arbitration Panel denied Gomez's claims and his request for expungement.
The FINRA Arbitration Panel found Claimant Gomez liable to and ordered him to pay to Respondent Merrill Lynch, Pierce, Fenner & Smith Inc.:
- $1,162,790.76 in compensatory damages;
- $127,035.90 in interest;
- $283,760.00 in attorneys' fees; and
- $33,660.00 in costs.
There are a lot of ways for us to look at this arbitration. Given the ensuing three-plus years of time that transpired from the filing of the initial Statement of Claim until the Panel ruled, it is likely that the parties were involved in failed negotiations concerning not only Claimant's claims but also Respondents' demands for repayment of the Promissory Note. We have absolutely no insight as to whether such discussions occurred or what they addressed, so that's merely conjecture on my part; however, one senses that more than one gambit was played by all parties -- judging by the results, Claimant lost in checkmate.
Claimant Gomez may well have filed his claims as a preemptive attack designed to buy negotiating time concerning his repayment of all/part/none of the Promissory Note. The Statement of Claim was filed way back in October 2009 -- so, if delay was Claimant's aim, he achieved some 3 1/2 years of it. Of course, when the Panel tallied the damages, that delay sort of cost him $127,000 in interest and you need to factor in the costs of not only his legal fees but also the nearly $300,000 in costs and attorneys' fees he was ordered to pay. As such, the cost of playing for time often comes with a sizable bill.
On the other hand, Claimant may not have been about any games but dead serious as to his causes of action and truly believed that he had a shot at winning nearly $4 million in damages. Unfortunately, the Panel didn't buy his arguments and he wound up with an Award against him of about $1.6 million.
For additional BrokeAndBroker coverage about promissory notes, READ:
- Lehman Brothers In Bizarre FINRA Promissory Note Cases
- Wells Fargo Wins FINRA Hostile Work Environment Promissory Note Arbitration
- A UBS Promissory Note Arbitration Disclose The Hidden Costs Of Litigation
- UBS Loses Lawsuit After Former Employee Calls Firm Immoral and Unethical
- Lehman Brothers Loses Promissory Note Collection Case
- UBS Wins Promissory Note Case
- Ameriprise Sort Of Wins FINRA Promissory Note Arbitration
- Morgan Stanley Wins Promissory Note Case Against Former Broker
- Ameriprise Wins Employee Promissory Note Case
- Lehman Brothers Loses Nearly $500,000 Collection Case Against Former Employee
- Lehman Brothers Cited For Repo 105 In Promissory Note Case
- Lehman Brothers Sought $159,000 Repayment Of Promissory Note From Former Broker But Gets Zippo
- Former Morgan Stanley Smith Barney Employee Wins Promissory Note Arbitration
- Lehman Largely Wins A Promissory Note Collection Case In FINRA Arbitration
- Employee Loses But Sort Of Wins Twilight Zone Promissory Note Arbitration Against Citigroup And Morgan Stanley
- Lehman Loses Another Promissory Note Collection Case
- Lehman Brothers Loses Another FINRA Promissory Note Collection Case
- Ameriprise Employee Goes Down In Flames In Promissory Note Case
- FINRA Arbitrators Wrestle With Considerable Confusion In Wells Fargo Employment Case
- Allegations Of Intolerable Work Conditions Fail In Former Merrill Lynch Employee's Promissory Note Case
- Eloquent Arbitration Decision Rules For Merrill Lynch In Pro Se Employee Promissory Note Case
- Former Wachovia Employee Files $1.3 Million Forgivable Loan Arbitration Claim Against Firm
- Wells Fargo and Former Employee Go Toe To Toe Over Promissory Note and Deferred Compensation
- UBS Loses Million Dollar Promissory Note Arbitration Against Former Employee
- UBS Goes After Former Broker for Three Promissory Notes
- Broker and Brokerage Firm Earn TKOs in U5 Expungement / Promissory Note Arbitration
- Raymond James Wins Attorneys' Fees In Florida FINRA Arbitration To Recover On Employee Promissory Notes
- Lehman Suffers First Loss in FINRA Arbitration Collection of Promissory Notes
- Wells Fargo / Wachovia Loses Slam Dunk FINRA EFL / Promissory Note Arbitration
- UBS Admonished for Unilateral Decision to Close Kalamazoo Office in FINRA Promissory Note Arbitration
- Employee Forgivable Loans (EFL) and Wall Street Promissory Notes (PN) Round-up
- Losing the Battle of the Water Cooler: UBS's Promissory Note Arbitration Against Former Employee
- FINRA Arbitration Win for LPL in Promissory Note and Rep Agreement Case
- Split FINRA Arbitration Panel Wrestles with Citigroup Arbitration Over Promissory Note
- Merrill Lynch Hoisted On Its Own FINRA Promissory Note Arbitration Petard
- Former Employee Settles Promissory Note Case with Morgan Keegan
- Wells Fargo Loses Defamatory U5 / Promissory Note Arbitration
- Wachovia Whacks Former Broker in Promissory Note Case
- Wells Fargo Gets Stuffed at the Goal Line by Former Employee in Promissory Note Arbitration
- A Closed Branch Shuts Door On UBS's Claim for EFL / Promissory Note Repayment
- Lehman Seeks to Collect Unpaid Loan Balances -- And Its Former Employees Are Furious
- Take It Or Leave It -- FINRA Arbitrator Calls Wells Fargo's Conduct Unconscionable.
- Wachovia Wins Promissory Note / Bonus Retention Arbitration in Market-Timing Case
- Former Ameriprise Employee Says Firm Lied to Him -- and FINRA Panel Forgives Promissory Note Debt
- Former UBS Employee Settles With Firm and Obtains Expungement of U5
- Wells Fargo / Wachovia Wins And Loses Against Former Employee
- Another Pro Se Respondent Settles a Promissory Note Case
- Let's All Settle Down: Former Employer and Employee Work It Out At the Last Minute
- An Instructive Employee Promissory Note Case (FINRA Arbitration Case)