A former Merrill Lynch advisor who worked at the firm for 35 years lost a $5 million arbitration case seeking damages for libel and other misconduct against Merrill Lynch as well as the expungement of a client complaint that was later withdrawn.

While an arbitration panel denied advisor Charles Doraine's request for damages, it found the client's withdrawn complaint was based on misinformation and ordered an expungement of Doraine's record.

Doraine's attorney, Donald Feferman, alleges foul play on Merrill's part.

He claims the firm solicited the complaint from the client – which is evident in at least two emails from the client.

"The bottom line was that because the only proof that we had that the complaint was solicited by the broker-dealer were the emails from the customer who filed a complaint," Feferman says, "the panel chose to believe the denials by Merrill Lynch even though it was absolutely clear the client had no reason to lie about being solicited to file the complaint."

Doraine may have been terminated because he refused to annuitize his business, Feferman adds.

A Merrill spokesman declined to comment on the case. Arbitration records confirm Merrill denied the charges.


Doraine, now an independent advisor in Corpus Christi, Texas, joined Merrill's thundering herd in 1972, according to FINRA records. After leaving the wirehouse giant, he’s built a successful practice and operates from an office in the same building as Merrill, his attorney says.

In arbitration, Doraine sought damages for tortious interference with prospective relations, intentional infliction of emotional distress, libel and conspiracy.

The arbitration panel only agreed to expunge his record – a request Merrill did not contest, according to arbitration documents.

"The customer's documents showed that her complaint was based on misinformation and she had no personal knowledge of the allegations that she made," the panel ruled. The panel also said that additional testimony from Merrill and Doraine verified that the client's withdrawn allegations were false.

The costs of the arbitration process were to be split between Doraine and Merill, the arbitrators ruled. "This is just another example of why the brokerage industry favors arbitration," Feferman says.

This story has been updated to reflect that the client complaint came after Merrill and the advisor parted ways.

Read more:


Register or login for access to this item and much more

All On Wall Street content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access