Saturday, January 06, 2007

News Story

When stockbroker Mitchell Slater told his friends that he was suing his former employer, Merrill Lynch, for blackening his reputation, they encouraged him. When he informed people in the brokerage industry what he was doing, they told him that he was crazy.
Winning a suit against Merrill Lynch is hard. Slater's lawyer, Brian J. Neville of New York City, said by phone on Wednesday, “They're tough to beat. They have extremely qualified lawyers.”
Slater, 46, sitting in his office at Smith Barney in Florham Park, said quietly, “I stand alone, in a small room of people who have beaten Merrill Lynch.”
Slater had moved from Merrill Lynch in Morristown to Smith Barney in January 2005, he said, because of the poor way the branch was being run by the manager, Thomas Fickinger, and because of altercations with Thomas Kenney, another officer, who -- Slater claimed -- had made an anti-Semitic remark. Slater was taking his largest client, Thomas Gengaro, with him.
Slater claimed that Merrill Lynch then defamed him by accusing him of churning that client's account and other improper sales practices, and put these complaints into Slater's official record. Merrill Lynch offered the client $100,000, apparently to resolve the matter.
In his statement to the panel, Slater's lawyer said that Gengaro had not only denied making any accusations against Slater but claimed that Merrill Lynch had made up the statements. The $100,000, Gengaro allegedly said, was to persuade him to keep his account there.
An arbitration panel of the National Association of Securities Dealers in Newark has ordered Merrill Lynch and Fickinger to remove defamatory statements on Slater's official record, concluding that the client who had supposedly complained about Slater had not actually complained, so “no reporting of the allegations is appropriate.” Also, the charge that Slater had mismarked that client's market orders “was initiated for competitive purposes.”
But the panel did not award Slater any compensation.
Merrill Lynch issued this statement: "During the hearing, one of Mr. Slater's clients testified that he, the client, had come to our offices with his accountant and complained to Merrill Lynch that Mr. Slater had mishandled his account.”
Also, “While the panel ordered the U-5 changed, it also refused to award Mr. Slater damages."
Slater said he learned of the black marks on his official record when states where he was registered to practice wrote to tell him that he was no longer permitted to practice there. “It was a shock to my system,” he said.
Slater gave this history of the events: During the Presidential election of 2003, he was reprimanded by Kenney, administrative and compliance manager for the branch, for sending some friends a list of Bruce Springsteen's songs at a Vote for Change concert. Kenney claimed that this was prohibited under the firm's political-support rules.
Later, Slater alleged, he had emailed Kenney that certain sexual emails he had sent to females in the office were inappropriate. Kenney, according to Slater, ran into his office, physically threatened him, and screamed, “Jews like you never served in the military for the U.S.”
Kenney has denied the charges.
What had Slater thought were his chances of winning? He paused. “Fifty-fifty. I knew that I had the facts, but anything can happen.”
He continued: “I didn't want to do this. I gave them all sorts of outs. But they didn't expect me to follow through, they didn't expect me to spend money to defend myself.
“I didn't do it for the money,” he continued. “I didn't want this to happen to anyone else.
“I bled Merrill Lynch. I worked for them for 17 years, and my father worked there all his life.” (His father had been in the Roseland office.) I was a sales manager, part of the training program, a golden child - before I left.”
His lawyer, Neville, said that when there are gray areas, brokerage firms lean over backwards to protect their employees. But not former employees. “And brokers, unlike doctors, CPAs, and other professionals, have their records easily accessible to the public. There's no review, no screening - the records are just there. Their kids could do a Google search and find it.”

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