A FINRA arbitration panel has awarded former Merrill Lynch co-president Ahmass L. Fakahany $1.2 million out of the more than $70 million in compensatory damages he sought from his former employer.

Fakahany’s claim was first filed in December 2008, months after he officially left Merrill Lynch in February 2008. His departure came as the firm swapped leaders, with Chief Executive E. Stanley O’Neal stepping down in October 2007 as the credit crisis took hold. He was replaced in December 2007 by John Thain.

Fakahany was promoted to the co-president position by O’Neal in May 2007, records show. Fakahany’s claim against Merrill Lynch cited quantum meruit, unjust enrichment and promissory estoppel. The case, according to a source familiar with the situation, was tied to Fakahany’s bonus compensation.

The respondents, including Bank of America, Merrill Lynch and certain executives including John Thain, denied the allegations. More details about the panel proceedings were not revealed.

In its decision, the FINRA panel awarded $1.2 million in compensatory damages to Fakahany and denied all other relief. In addition to the $70 million in compensatory damages, Fakahany was seeking unspecified attorney’s fees, costs and disbursements, interest and other relief.

Fakahany’s lawyers were not available for comment on the decision.

The compensation issue addressed by the claim pre-dated Bank of America’s acquisition of Merrill Lynch, said Bank of America Spokesman Bill Halldin. Fakahany was never employed by Bank of America, Halldin said.

The FINRA panel charged the respondents in the case to pay $27,600 in fees, including $3,600 for adjournment fees, $1,200 for discovery-related motion fees and $22,800 for hearing session fees. Merrill Lynch Pierce Fenner & Smith, a broker-dealer and investment advisor, and Banc of America Securities were also ordered to pay $10,000 in member surcharge, pre-hearing and hearing process fees.

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