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Ex-Merrill brokers withdraw lawsuit over loss of international business

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Former Merrill Lynch advisers who focused on international business are switching tactics in their bid to win damages from their ex-employer, which they accuse of policy changes that handicapped their business.

Advisers Graciela Perez, her son Jorge, and Miguel Sosa filed their lawsuit in federal court in April 2016, arguing that Merrill had implemented policies in recent years that hindered their ability to grow and serve clients. They withdrew their case this week, according to court documents.

"We withdrew the class action claims in order to avoid … [a prolonged court case] and to obtain a quick and direct resolution of the valuable claims in a favorable industry forum," Michael Taaffe, their attorney, said in a statement

Taafe, who is based in Sarasota, Florida, added that his firm will file "numerous" claims in FINRA arbitration against Merrill Lynch.

Neither the advisers nor their attorney could be reached for additional comment.

Moving the dispute to a new forum appeared to be a partial win for Merrill, which pushed for a change in venues.

"We have denied the allegations made in the original complaint as well as the amended complaint filed a few weeks ago. We have [also] argued that the proper forum for this was arbitration," a spokesman said.


Merrill once employed a sizable contingent of approximately 3,000 brokers focused on serving international clients or who did some international business, according to the lawsuit. But following the financial crisis, the brokerage merged with Bank of America and later sold its overseas business to Swiss bank Julius Baer in 2013.

That sale did not include about 300 stateside brokers serving international clients. The plaintiffs argued that Merrill failed to continue to support their practices, particularly due to the fact that a lot of expertise left with the sale, according to court documents. They also claimed that additional policy changes harmed their practices. For example, Merrill created a "crippling restriction" that prohibited advisers to travel to certain countries to see clients or prospect for new business. The firm also created new minimums. For example, Canadian clients were required to have $5 million or more with Merrill Lynch, according to the plaintiffs.

They alleged that brokers were forced to leave the firm in order to continue servicing clients, which disrupted their practices and prevented them from gaining new assets and clients.

Indeed, the plaintiffs quit Merrill Lynch after long stints at the wirehouse.

Perez and her son opened Perez Wealth Management in 2015, and are affiliated with Bolton Capital Asset Management. The elder Perez had worked at Merrill for nearly 20 years, according to FINRA BrokerCheck records. Jorge Perez started his career at the wirehouse in 2003.

Sosa was also a Merrill veteran, having begun his career there in 1982.

He left in 2016 to open his own firm, Premia Global Advisers, in Coral Gables, Florida. He launched his firm with help from Dynasty Financial Partners, which said at the time that he oversaw more than $400 million in client assets.

For its part, Merrill denied the allegations in court, arguing that the advisers had not proven that certain employment practices had a disparate impact upon them.

It was not immediately clear whether the advisers had already filed claims in FINRA arbitration. Unlike in civil court, the proceedings are not public.

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