Roeser Bucheit & Graham Wins Arbitration Against Merrill Lynch

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FINRA orders Merrill Lynch to pay over $230,000 to former Merrill Lynch employee and denies Merrill's claims under promissory note.

Blaiming an employee for the company's failures is never a good strategy.

The Financial Industry Regulatory Authority (FINRA) awarded former Merrill Lynch employee, Jeffrey Wescott, over $230,000 in compensatory damages and denied and dismissed all of Merrill Lynch’s claims against him for breach of a promissory note. (Merrill Lynch, Pierce, Fenner & Smith vs. Jeffrey R. Wescott FINRA No. 10-04592, April 29, 2013). During the arbitration FINRA also applied an adverse inference against Merrill Lynch for its conduct during the litigation. Wescott was represented by the law firm of Roeser Bucheit & Graham LLC, a Chicago-based litigation firm.

In its statement of claim, Merrill Lynch alleged that Wescott, who joined Merrill Lynch’s Private Bank and Investment Group in 2007, breached a promissory note and owed it over $650,000 in principal, interest and attorney fees. In his response, Wescott denied that he owed any money under the note on the grounds that the note was intended to be tax deferred compensation. He further asserted that the note was non-recourse secured exclusively by his monthly compensation and, as such, Merrill Lynch was barred from collecting after he left the company. The April 29 FINRA award did not explain the basis for its ruling, but agreed with Wescott that there was no liability under the promissory note, stating only that Merrill Lynch’s claims on the note “each and all, are hereby denied and dismissed with prejudice.”

Wescott also asserted -- and prevailed -- on his counterclaims against Merrill Lynch. He alleged that Merrill Lynch fraudulently induced him to join the company through a series of false promises during the recruitment process and failed to honor those representations after he joined the company. In papers filed with FINRA, Merrill Lynch argued that Wescott could not rely upon the company’s promises and representations during recruitment because they were not subsequently included in the employment agreement between the parties.

Wescott’s lawyer, Darrell Graham, said that “it is fundamentally wrong for a company to make material representations to a prospective employee during the recruitment process and later claim that the employee has no right to rely on those representations.” He went on to say that “the law does not countenance such employment practices.” FINRA awarded Wescott $232,505 in compensatory damages on his counterclaims. It also required Merrill Lynch to pay all of the forum fees totaling $12,000.

Wescott was represented at the arbitration by Darrell Graham and Peter Roeser of the Chicago-based law firm Roeser Bucheit & Graham LLC. Roeser Bucheit & Graham is a commercial litigation law firm with a significant employment law practice. It litigates high stakes commercial matters in state and federal courts, appellate courts, arbitrations and mediations. For more about the firm and its committment to value based fee arrangements visit

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Peter Roeser
Roeser Bucheit & Graham LLC
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