NEW YORK, NY / ACCESSWIRE / June 10, 2024 / National investment loss and securities attorneys KlaymanToskes announces that the law firm has filed a FINRA arbitration claim against Merrill Lynch, a division of Bank of America (NYSE:BAC), on behalf of a former financial advisor who has lost over $3.2 million in deferred compensation damages. All former Merrill brokers/advisors who have suffered deferred compensation damages in excess of $100,000 are encouraged to explore all their legal options and to contact KlaymanToskes immediately at 888-997-9956.
KlaymanToskes reports that the law firm is pursuing multiple claims against Merrill in deferred compensation disputes, and has filed a FINRA arbitration claim (no. 24-01224) on behalf of a former Merrill advisor who is seeking to recover over $3,200,000 in deferred compensation damages. According to the lawsuit, when the advisor left Merrill, the firm invoked its “Cancellation Rule,” which required a vesting period of five to eight years as part of its deferred compensation plans. As a result, Merrill Lynch withheld the broker’s deferred compensation that was valued at just under $1.7 million, which today would be worth over $3.2 million.
The lawsuit follows a recent class action complaint (No. 3:24-cv-00440) which alleges that Merrill’s deferred compensation plan for employees qualifies as an employee benefit plan governed by the Employee Retirement Income Security Act of 1974, and is therefore subject to its anti-forfeiture provisions. Financial Professionals should know that class-actions may take many years to resolve, and that payouts are generally heavily undervalued. KlaymanToskes previously conducted a detailed study of securities arbitration versus class action and concluded that Financial Industry Regulatory Authority (FINRA) arbitration claims traditionally obtain an overall higher rate of recovery as opposed to participating in a class action lawsuit.
Merrill offers two deferred compensation plans for its financial advisors: the Short Term Deferral Plan and the WealthChoice Plan. Under the Short Term Deferral Plan, advisors receive a commission percentage based on the assets they bring with them to the firm, with 50% of these awards invested in the plan and vesting over five years. The WealthChoice Plan automatically allocates a portion of a financial advisor’s commissions into the plan, which vests over eight years.
Merrill withholds financial advisors’ deferred compensation plans if the advisor leaves before the vesting date. This is called the Merrill “Cancellation Rule.” KlaymanToskes’ investigation has determined that Merrill’s “Cancellation Rule” violated ERISA’s vesting and anti-forfeiture requirements. Therefore, Merrill wrongfully denied the advisor deferred compensation which was earned and would have since appreciated significantly.
If you are a former Merrill financial advisor or other securities industry professional facing an employment dispute, contact attorney Lawrence L. Klayman at (888) 997-9956 or by email at investigations@klaymantoskes.com in furtherance of our investigation.
About KlaymanToskes
KlaymanToskes is a leading national securities law firm co-founded by former securities broker Lawrence L. Klayman, which practices exclusively in the field of securities arbitration and litigation on behalf of both investors and financial industry professionals throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
Contact
Lawrence L. Klayman, Esq.
KlaymanToskes, P.A.
+1 888-997-9956
investigations@klaymantoskes.com
SOURCE: KlaymanToskes, P.A.