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Former Merrill Lynch International Advisors File Class Action

By George C. Miller, Esq. of Shustak Reynolds & Partners, P.C. posted on Tuesday, December 13, 2016.

George C. Miller

George C. Miller


Location: San Diego, California
Phone: (619) 696-9500 (Ext. 105)
Direct: (619) 501-8270
Email[email protected]

George C. Miller
619.696.9500 ex. 105
[email protected] 

A group of former Merrill Lynch international financial advisors have filed a class action complaint accusing the firm of fraudulently misrepresenting its commitment to the international marketplace. According to the complaint, captioned Perez, et al. v. Merrill Lynch & Co., Inc., et al., those misrepresentations, and changes Merrill Lynch made in its international wealth management platform, caused international advisors to lose existing clients and severely hampered their ability to generate new business.

The case ultimately arises out of Merrill Lynch’s decision to sell much of its international division to Julius Baer in August 2012. International financial advisors based in the U.S. were not, however, part of that sale. Merrill allegedly reassured those advisors that despite the sale the firm was fully committed to supporting their international business. Notwithstanding those promises and assurances, in July 2015, Merrill made sweeping changes to its international division, including an increase in its account minimums from $500,000.00 to $1 million for existing clients. The firm also scaled back the number of countries in which it did business. These and other changes at the firm, the plaintiffs allege, were discriminatory and damaged the firm’s international financial advisors.

The litigation remains in its early stages. Merrill Lynch filed a motion to dismiss and a motion to compel arbitration in July 2016, which resulted in the plaintiffs filing an amended complaint (which Merrill has not yet answered). Later in the proceeding, the plaintiffs will move to certify the class. To prevail on that motion, they must convince the court that (1) the class of potential plaintiffs is so numerous that joinder of each member is impracticable; (2) that there are questions of law or fact common to the class; (3) that the claims or defenses of the class representatives are typical of those of the class; and (4) that the class representatives will fairly and adequately protect the interests of the class. Merrill will likely focus its challenge on the commonality and typicality elements, as each international financial advisor necessarily has a different client base, suffered different degrees of harm and may have been told different things about Merrill Lynch’s commitment to the international marketplace. Given those differences, and the possibility of obtaining a larger recovery in an individual arbitration or litigation, potential class members may want to “opt out” from the class if it is certified and pursue their individual claims in the appropriate forum.  

Shustak Reynolds & Partners P.C.’s San Diego and Southern California FINRA, SEC and financial services attorneys have extensive experience representing financial advisors and other financial professionals in a variety of securities disputes, including FINRA arbitrations, FINRA and SEC investigations and enforcement actions. Contact us today for a confidential consultation. 

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