A Financial Industry Regulatory Authority Inc. arbitration panel has awarded former Merrill Lynch broker Miguel Ballestas $750,000 in compensatory damages, saying that the firm defamed Mr. Ballestas on his U5 form.
Mr. Ballestas was employed by Merrill Lynch from 1987 until June 2014, when his BrokerCheck record indicates he was discharged based on an "allegation related to possible insider trading" in advance of a corporate merger announcement in September 2013.
Merrill Lynch brought the action against Mr. Ballestas to arbitration, saying that he had failed to repay a promissory note for $407,451.40, plus interest, which was due upon termination of his employment.
In his counterclaim, Mr. Ballestas asserted that Merrill Lynch was guilty of breach of contract, breach of fiduciary duty, negligence, and defamation on his Central Registration Depository Form U5, all of which were related to the termination of his employment.
At the close of his hearing, Mr. Ballestas asked for $26 million in compensatory damages.
In addition to awarding lower damages, the
arbitration panel recommended the expungement of the termination explanation that Merrill Lynch filed on July 2, 2014, and said that the explanation should be changed to "conduct resulting in loss of management's confidence." It also denied Merrill Lynch's claim regarding Mr. Ballestas' note.
Mr. Ballestas is now principal of his own hybrid firm, Ballestas Group, in Miami, Fla.
