Merrill Lynch-Wenatchee accused

November 9, 2003
By Kelli Shillito
The Wentchee World

WENATCHEE — Licensed brokers at Merrill Lynch’s Wenatchee branch are accused of mismanaging client portfolios in an arbitration suit before the New York Stock Exchange.
Attorney Lawrence L. Klayman is pursuing the suit on behalf of at least one Microsoft employee and Merrill Lynch account holder who relied on the software company’s Employee Stock Option Plan for retirement. The suit seeks more than $10 million in compensatory damages from Merrill Lynch branch offices in Seattle and Wenatchee, according to a press release from Klayman’s firm.

“Our clients lost a tremendous amount of money for no reason,” Klayman said in an interview. “The Wenatchee branch had several large Microsoft folks who have lost their shirts. They were all totally invested in Microsoft stock.”

Klayman declined to say how many clients are located in the Wenatchee area.
An impartial panel of arbitrators will hear arguments from the plaintiffs and Merrill Lynch before ruling. Arbitration is common in cases like this, faster than court litigation and the rulings are final and binding.

According to Klayman, Merrill Lynch brokers sold Microsoft employees Unlimited Advantage accounts, which are advertised to include financial advice and guidance. Some clients never got advice, Klayman said. “The services that the clients received were virtually nil,” he said. Bill Halldin, a Merrill Lynch spokesman in Roseville, Calif., denied Klayman’s allegations.

“We take all client concerns very seriously and address them on a case by case basis, as warranted,” Halldin said in a written statement.
In a phone interview, Halldin said, “The issue is the employees did not want to give up the stocks because the stocks had a history of going up.” When stocks fell, Halldin said the employees suddenly wanted diversification.

Since Klayman’s firm announced the filing last week, more Microsoft employees have joined the suit, Klayman said. “People really don’t understand how they’ve been mismanaged,” he said. “They think, ‘Oh, it’s just the market.'”

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