An arbitration panel ordered an Ameriprise advisor to pay back nearly $1 million to his former employer, Merrill Lynch.

Though Merrill won damages for breach of contract and a promissory note, the award fell short of the $1.4 million that the wirehouse ultimately sought from advisor Geoffrey Ellis Orbach and the panel denied two other requests.

Orbach, who had once worked for Merrill in the late 1980s, joined the wirehouse from Morgan Stanley in 2012, according to BrokerCheck records. He left in August 2013 for Ameriprise, which was also named as a respondent in the case.

A month later, Merrill filed its arbitration claim, according to FINRA records.


In addition to its claims against Orbach, Merrill also accused both the advisor and Ameriprise of misappropriating confidential information, unfair competition and unfair enrichment among other charges, according to FINRA records. Merrill reached a settlement with Ameriprise and dropped its claims prior to the beginning of the hearings.

Orbach issued his own counterclaims, asking the panel for $1 million in lost wages. By the close of the hearing, he raised the amount to $1.6 million.

Merrill, meanwhile, asked for nearly $1.4 million in damages and attorney's fees. The wirehouse also asked for a one-year injunction against Orbach from asking Merrill advisors to join him at Ameriprise, records show.

The wirehouse also requested that the panel authorize a revision of his Form U5 "to reflect the precise type and extent of Orbach's violations of Merrill Lynch internet policy," according to FINRA records. No further details were given on that charge.

Industry insiders say that it is not unusual for firms to include non-compete agreements in contracts. However, recruiter Courtney Raymond notes that firms also often give pay incentives to advisors to help them recruit their former colleagues.

On the other hand, attorneys say that it is unusual for Merrill to seek a revision of the language on a U5. "I've seen a lot of times that the U5 is amended. They say oh, we didn't say right thing or we missed something. That's common. I've never seen a panel asked to amend a U5," says Erwin Shustak, an attorney with San Diego-based Shustak & Partners.

Neither Orbach nor his attorney, John Hubbard, responded to requests for comment. Ameriprise declined to comment.

At the close of the hearing process, Merrill further requested that all of the arbitration fees and costs be assigned to Orbach, and had dismissed its joint claims against the advisor and Ameriprise after the three parties reached a partial settlement, according to the records.

The panel, which issued its decision last week, ordered Orbach to pay Merrill about $960,000 in damages, interest and attorney's fees while also rejecting his counter claims. However, the panel also denied Merrill's requests to prevent Orbach from soliciting Merrill employees and to revise his Form U5. Merrill, Ameriprise and Orbach had to share the hearing fees of $9,300.

A Merrill spokesman said that the firm was pleased with the decision and declined to comment further.

It's not the first time this year that Merrill sought a clawback from a former employee who left for Ameriprise. Last month, the wirehouse lost an arbitration case against advisor Rene Espinoza. Merrill had sought about $250,000 from Espinoza. He actually left Ameriprise to join the wirehouse in 2010, only to return to Ameriprise after a falling out with Merrill in 2011.

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