One More Snag in Merrill-Advest Deal

Two former Advest reps, William Fenwick and Timothy Fisher, have filed a class-action lawsuit against Merrill Lynch and Advest

Two former Advest reps, William Fenwick and Timothy Fisher, have filed a class-action lawsuit against Merrill Lynch and Advest for hijacking several hundred thousand dollars in accrued benefits they say were promised to them as Advest employees. According to the lawsuit, the class as a whole has been denied as much as $50 million or more in benefits accrued under Advest's nonqualified benefit plan, or AE plan.

As chronicled in this magazine (see “Failure to Launch,” May 2006), Merrill's acquisition of Advest, announced last September, has been nothing short of a disaster — with an estimated 80 percent of the 500 advisors at Advest having left Merrill Lynch. At issue in the lawsuit is the fact that Merrill allegedly amended Advest's AE plan after the deal was announced, requiring plan participants to stick with Merrill for at least 18 months after the acquisition to receive their benefits.

But the AE plan is governed by ERISA, says the lawsuit, and ERISA dictates that participants have a nonforfeitable right to 100 percent of their accrued benefits after seven years at a firm. Even assuming it was not subject to ERISA, the AE plan gave participants the express right to leave Advest without forfeiting any of their benefits if they left between nine and 24 months after a change of control at Advest, the lawsuit claims.

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