Lawyer Claims U5 Defamation Claim Tossed Before it Was Tried

The lawyer for a former Merrill Lynch broker has accused an NASD arbitrator of deciding a key part of the broker’s case before he even had a chance to offer his arguments.

The lawyer for a former Merrill Lynch broker has accused an NASD arbitrator of deciding a key part of the broker’s case before he even had a chance to offer his arguments.

According to a story in Friday’s New York Post, Jeffrey Liddle, a lawyer representing Christopher Pan, has accused NASD arbitrator Sherri Hughes, with having dismissed Pan’s defamation claim against Merrill before Liddle was even able to argue the claim. His charge is based on an email Hughes sent to her colleagues.

Arbitration panels are not supposed to discuss the merits of a particular case before each side has been able to make arguments. Liddle is seeking the dismissal of Hughes as well as the other panelists. Pan’s original case against Merrill included claims that they had improperly characterized the reasons for his dismissal from the firm on his U5 form.

Recently, a New York court ruled that firms have “absolute privilege” over what they write in a former rep’s U5 form. Essentially, the decision means that reps cannot sue brokerage firms for allegedly defamatory comments made on U-5 termination forms.

For more on this story, go here.

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