The Frustrations And Atrocities Experienced by Merrill Lynch Customers

In today's public customer FINRA arbitration, we have a failed second-bite of the same wormy Merrill Lynch apple. As an earlier FINRA Arbitration Panel had found, the Merrill Lynch customers were frustrated by a "technical error" that arose "despite multiple attempts to work around it." By the time the customers filed their second arbitration, those frustrations had apparently risen to the level of atrocities. An odd choice of words by someone -- a somewhat odd case all around.

2023 FINRA Arbitration Award

In a FINRA Arbitration Statement of Claim filed in May 2023 and as amended, public customer Claimants asserted:

misrepresentation of facts; omission and distortion of facts; fraud; perjury; discrimination and harassment; libel; slander; defamation; failure to supervise; negligence; unauthorized sell outs; witness coercion; document forgery and document spoilage; and noncompliance with FINRA Rules of Arbitration. 

Ashok Aiyappa, Anjali Aiyappa, and Kavitha Aiyappa, Claimants, v. Merrill Lynch, Pierce, Fenner & Smith, Inc., Peter Anthony Ambrose and Gregory Lucky Nerantzis (FINRA Arbitration Award 23-01323 / October 11, 2023 )
https://www.finra.org/sites/default/files/aao_documents/23-01323.pdf

The FINRA Arbitration Award asserts that:

In the Statement of Claim, as amended, Claimants requested: attorneys’ fees estimated at $10,000.00 to $20,000.00; arbitration costs estimated at $15,000.00 to  $20,000.00; and an admission of wrongdoing by Respondents and a written apology consistent with the apology offered to Claimants by Bank of America.

Respondents generally denied the allegations, asserted affirmative defenses and sought monetary sanctions and an expungement of the arbitration from Respondent Ambrose's and Respondent Nerantzis' Central Registration Depository.

Lawyering Up?

Under the heading of "REPRESENTATION OF PARTIES" we have this:

For Claimants Ashok Aiyappa (“Ashok”), Anjali Aiyappa (“Anjali”), and Kavitha Aiyappa (“Kavitha”): Ashok Aiyappa, Great Falls, Virginia.

For Respondents Merrill Lynch, Pierce, Fenner & Smith, Inc. (“Merrill”), Peter Anthony Ambrose (“Ambrose”), and Gregory Lucky Nerantzis (“Nerantzis”): Kathryn B. Rockwood, Esq. and Logan Fisher, Esq., Bressler, Amery & Ross, P.C., Florham Park, New Jersey.

As to Respondents, it seems clear that they were represented by two lawyers from the well-known law firm of Bressler, Amery & Ross, P.C. How do we know that two lawyers from Bressler represented the Respondents? The FINRA Arbitration Award added the title of "Esq." after the names of "Kathryn B. Rockwood" and "Logan Fisher." As to Claimants, I have no idea what to make from the Award's presentation. Is Ashok Aiyappa a lawyer? If so, there is no appended "Esq." If Ashok Aiyappa is not a lawyer, I would think that the better practice for FINRA would be to so designate that lack of standing in the Award. Lawyer or not, the Award asserts in pertinent part that:

On May 16, 2023, Claimants Kavitha and Anjali each filed letters authorizing Claimant Ashok to represent them in this matter, and confirmed he is not being compensated for this representation.

Atrocities

Then there was this somewhat jarring assertion under the "CASE SUMMARY" in the form of the last sentence of the first paragraph:

The causes of action relate to Claimants allegations of various atrocities and fraudulent activities by Respondents against Claimants having occurred between 2018 and 2022.

I'm not quite sure what to make of the Award's use of the term "various atrocities." Is that meant as a cynical aside by the Arbitrators? If so, I just don't think it's appropriate for such a snide comment to be noted in an Award -- all the more so when we accept the fact that FINRA's version of customer arbitration is mandatory upon the customer and that the forum is essentially industry sponsored. If the "various atrocities" references is derived from the language of Claimants' Statement of Claim, then I think the better practice would be to so note the source rather than raise the inference that the arbitrators are taking a shot.

Motion to Dismiss ("MTD")

Before the arbitration headed into a plenary evidentiary hearing, we have this development:

On September 25, 2023, the Panel heard oral arguments on the MTD. During the pre-hearing conference, Claimant Ashok stated that he is not intended to be a Claimant in this matter despite having executed a Submission Agreement. Rather, he stated his role is limited to representing Claimants Anjali and Kavitha, his adult daughters. On September 26, 2023, the Panel issued an Order directing Claimants to confirm in writing who the actual Claimants are, and for Claimants Anjali and Kavitha to file executed Submission Agreements, as they had not yet done so. On September 27, 2023, Claimants Anjali and Kavitha filed executed Submission Agreements, as well as notice of their authorization for Claimant Ashok to represent them, but the issue of whether Claimant Ashok was an actual Claimant was not addressed. As Claimants did not comply with this portion of the Order, the Panel determined the Panel’s subsequent Order on the MTD would apply to all Claimants.

On October 2, 2023, the Panel granted the MTD as follows:

On July 27, 2022, a prior FINRA arbitration panel issued a determination against Claimant Ashok and his wife and assessed various fees against them. Thereafter, on May 10, 2023, Claimants filed their claim in the instant matter. On August 10, 2023, Respondents in the instant matter filed a Motion to Dismiss Claimants' case because, in effect, Claimants are requesting reinstatement of the original claims before us, a new arbitration Panel, and asks only for an apology as relief. On September 25, 2023, the Panel convened a pre-hearing conference to hear arguments on Respondents' Motion to Dismiss. Although we respect Claimant Ashok’s testimony that the Claimants were mistreated as customers by Respondents, their current claim is duplicative of the earlier case, with privity of party Claimants in the instant case. After a thorough review of the underlying evidence and FINRA's rules related to motions to dismiss, the Panel has determined that the Motion to Dismiss should be, and hereby is, granted.

In light of the Order granting the MTD, the Panel did not rule on the requests for expungement of Occurrence Number 2277814 for Respondent Ambrose and Occurrence Number 2277815 for Respondent Nerantzis. The Panel deemed the requests for expungement to be withdrawn without prejudice.

Bill Singer's Comment

Of note in today's reported arbitration is that Claimants had specifically asked for an "admission of wrongdoing" and a "written apology." I infer from those demands that the Aiyappas sincerely felt mistreated by Merrill Lynch. After all, Claimants were only seeking a somewhat modest five-figure range of fees and costs. Having had my own battles with some insensitive brokerage firms over the years, I can only imagine what must have transpired between the Claimants and Respondents -- and how the customers likely felt both mistreated and ignored by their brokerage firm and various of its employees.

As to the earlier Ashok Aiyappa, Varalakshmi Aiyappa, Kavitha Aiyappa, and Anjali Aiyappa, Claimants, v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , Peter Anthony Ambrose and Gregory Lucky Nerantzis (FINRA Arbitration Award 20-03257 / July 27, 2022)
https://www.finra.org/sites/default/files/aao_documents/20-03257.pdf, we have these pertinent statements replete with a bevy of typos and odd punctuation:

In the Statement of Claim, Claimants asserted the following causes of action: breach of fudiciary [sic] duty; elder abuse; manipulation; misrepresentation/non-disclosure; violation of client best interest code; unathorized [sic] trading; failure to supervise; account transfer foul up; trading manipulation; raiding disputes; wrongful terminaiton [sic]; libel, slander, and defamation; perjury; violation of codes and guidelines of regulatatory [sic] agencies, FINRA, SEC, CFPB; violation of Claimants’ constitutional right to select FA within Respondent; ; [sic] violation of Claimants’ constitutional right to select FA without Respondent; assault on Claimants’ dignity, honor, and personal integrity; protracted assault on Claimants’ peace of mind; and unprofessional and abusive conduct of Respondent’s management.

. . .

In Statement of Claim, Claimants requested that Respondent admit to wrongdoings as claimed by Claimants and a written public apology to all account holders; financial compensation in unspecified amounts for legal expenses and losses incurred due to failures of the financial advisory team and negligence of management; punitive damages in unspecified amounts, commensurate with the failure to act in clients’ best interest, assault on Claimants’ dignity, honor, and peace of mind for three years.

In denying the Claimants' claims and granting expungements to Respondent Nerantzis and Unnamed Party Charles Gaba in the 2022 FINRA Arbitration Award, the Arbitrators found, in part, that:

The Claimants and Respondent’s witnesses each testified that Gregory Nerantzis was not involved in the allegedly unauthorized trading when the bonds were liquidated in September of 2018. The evidence also showed that Gregory Nerantizis [sic] stopped serving as Claimants’ financial advisor prior to that date so he was not involved in the alleged investment-related sales practice violation.

. . .

The testimony established that a technical error occurred that did not allow the transfer of the assets in the account before the liquidation. The error occurred despite multiple attempts to work around it.

The 2022 FINRA Award offers the arbitrators' finding that the source of Claimants' distress was a "technical error" that arose "despite multiple attempts to work around it." As such, it appears that, in fact, Claimants were somewhat victimized by dubious customer service and forced to endure many failed attempts to fix a mistake fostered not by them but by Merrill Lynch/Bank of America. I can only imagine the untold numbers of phone calls that were made to a useless 800 phone number masquerading as Customer Service. I can only imagine how many times these folks were told that the hold-up was merely a technical error and that the check would be in the mail by this time tomorrow.

How absolutely devilish a joke was played upon FINRA to see that over a year later, a number of technical errors in the form of typos persist in the 2022 FINRA Arbitration Award. 

• FINRA
• Merrill Lynch
• Sell Outs
• Fraud
• Bank of America
• Motion to Dismiss
• BrokeAndBroker
• Bill Singer