The Expert's Examiner


Wigart v. Merrill Lynch Pierce Fenner & Smith Inc., FINRA ID No. 20-00635 (Reno, NV Jan. 28, 2021).
April 3, 2021

Wigart v. Merrill Lynch Pierce Fenner & Smith Inc., FINRA ID No. 20-00635 (Reno, NV Jan. 28, 2021).

A sole Public Arbitrator holds in an explained award that Merrill Lunch defamed a former broker in its U5 description of her termination.

What happened?
“Respondent knew or should have known that by stating in the U5 that Claimant had opened a bank account without the client’s authorization she would be unemployable in the banking industry. Indeed, her manager testified he would not hire someone with this statement on her U5. And Claimant testified she had applied for a position at a number of banks with no success despite years of experience in the industry.”

Rationale Provided
As for why he ruled this way, Arbitrator Dean J. Dietrich says: “Under Nevada law, Respondent enjoys a conditional privilege to the charge of defamation, but the privilege can be overcome by a showing of ‘reckless disregard for the truth’ (Bank of America Nevada v. Boudreau, 115 Nevada 263 (1999)). The failure of Respondent to interview the client and accept the allegations at face value, despite her well-known memory impairment, and for the reasons cited above demonstrates reckless disregard for the truth and overcomes the privilege.” The pro se Claimant is awarded $50,000 in compensatory damages and expungement is recommended.

(ed: *The Arbitrator notes that: “the client was not interviewed by Respondent nor did she sign an affidavit supporting Respondent’s allegations.” **We noticed this statement at the end of the Award: “Awards are rendered by independent arbitrators who are chosen by the parties to issue final, binding decisions. FINRA makes available an arbitration forum -- pursuant to rules approved by the SEC -- but has no part in deciding the award.” The is the same disclaimer at the top of awards, but we hadn’t before noticed that it is repeated at the end as well.)

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