What You Need to Know
- A trust sought compensatory damages from Merrill over investments one of its reps made in American Airlines stock.
- The firm was accused of negligence, negligent supervision, breach of contract, breach of fiduciary duty and omission to state a material fact.
- Merrill declined to comment on the decision. Attorneys representing the trust did not immediately comment.
A Financial Industry Regulatory Authority arbitration panel on Tuesday ruled in favor of Merrill Lynch in a dispute brought against the firm on behalf of a trust that sought $20 million in compensatory damages over investments that one of its reps made in American Airlines stock.
Merrill on Friday declined to comment on the arbitration panel’s decision. Attorneys from the Boca Raton, Florida, law firm Menzer & Hill, who represented the trust, did not immediately respond to a request for comment.
The Amended and Restated Julian I. Stoopler Living Trust filed a claim on or about July 28, 2020, in which it alleged the wirehouse was guilty of negligence, negligent supervision, breach of contract, breach of fiduciary and omission to state a material fact regarding investments made “primarily” in American Airlines common stock.
The trust sought $20 million in accrued statutory interest, compensatory damages, costs, filing and hearing fees, and any other relief deemed appropriate by the arbitrators, according to an award document that the broker-dealer self-regulator posted on its website.
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Merrill denied the allegations and asked that the claim be dismissed and that any reference to the matter be expunged from the record of advisor Steven Jay Davidson, who was not named in the claim.
Davidson started his career in the financial services sector with Merrill in 1986 and has been with the firm ever since, according to his report on FINRA’s BrokerCheck website.