Dynasty Financial Partners, fighting a Merrill Lynch effort to force it into arbitration over a poaching dispute, contended in a court filing last week that the judge never ordered such a move, it never agreed to arbitrate, and there are no grounds to compel the firm to do so.
Merrill last month in court accused Dynasty of reneging on an agreement to arbitrate a legal dispute centering on the wirehouse's allegation that Dynasty and others staged a "pre-meditated corporate raid" on a $129 billion Merrill business to start a new RIA firm, OpenArc.
Merrill asked a federal court in Georgia to either lift the stay on court action against Dynasty specifically or require Dynasty to engage in the Financial Industry Regulatory Authority arbitration.
Dynasty, in its reponse last week, alleges Merrill's motion to enforce arbitration was made in bad faith and that the firm had misstated facts about the judge's arbitration order in an email to the court.
OpenArc and individual defendants in the case moved last year to stay the court proceedings and compel Merrill to arbitrate, a motion that Merrill didn't oppose and which the judge granted, according to Dynasty's filing, which contended Merrill knew no party had asked to compel Dynasty to arbitration.
Dynasty contends the stay should remain in place pending Merrill's arbitration process with the other defendants.
The judge's Oct. 1 order can't compel Dynasty to FINRA arbitration because the court never ruled on that issue and no one raised it in a court motion, Dynasty contends.
Although Merrill made "gross distortions of the record" informally during oral argument, the company "was and remains aware that there is no arbitration agreement between it and Dynasty," the motion states. It also contends Merrill has admitted Dynasty can't be compelled to arbitrate because Dynasty is not a FINRA member.
A spokesperson for Merrill parent Bank of America told ThinkAdvisor in an email Monday, "As our previously filed motion states, we are simply seeking the right to pursue our claims against Dynasty in the appropriate forum."
AdvisorHub reported on the filing on Friday.
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