Merrill Lynch's battle to void a $10 million (Dh36.72 million) arbitration ruling suffered a setback last week after a new court filing raised questions about its claims that a panel member had not disclosed her potential conflicts.
The brokerage giant, which Bank of America agreed to acquire in 2008, is challenging an April 3 arbitration ruling that awarded two brokers, Tamara Smolchek and Meri Ramazio, more than $10 million in damages stemming from unpaid compensation claims.
But now, one of its key arguments in a high profile case that could affect hundreds of ex-Merrill brokers — that the arbitration panel's chairwoman was biased — may fail because of the firm's own revelations.
Merrill alleged that the panel's chairwoman, Bonnie Pearce, did not properly disclose that she was married to a lawyer, Robert Pearce, who has represented clients against Merrill at least five times and won a $1.3 million award against the brokerage in 2003.Discovery
But late Wednesday afternoon, the firm filed a motion that revealed that a Merrill lawyer had in fact researched the husband, Robert Pearce, and his prior award against Merrill, before the start of arbitration hearings.
Merrill's attorney in the Smolchek case, Reed Smith LLP's Douglas Spaulding, late last week found five pages printed from Robert Pearce's website eight days before the first hearing, which was January 23.
The discovery was revealed in a Wednesday filing written by Miami lawyer Peter Homer, whom Merrill hired on January 26 to represent it after the Smolchek hearings began. Spaulding also found three more pages that had been printed two days before hearings and a copy of a 2003 arbitration award where Merrill was ordered to pay Pearce's clients $1.3 million in damages over misleading research.