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Do I have recourse against broker?

Posted by auntjen (My Page) on
Wed, Nov 19, 03 at 12:21

In my recent divorce, I was awarded 100% of my ex's SEP (retirement) account which was being administered by Merrill Lynch. The broker that we had always dealt with at ML told me that in order for the funds to be distributed to me, I would need to provide ML with a Qualified Domestic Relations Order (QDRO) that had been filed with the court. I proceeded to have an attorney draft the QDRO, and he charged me $350 to do so. The attorney sent the ML broker a courtesy copy of the proposed QDRO draft, asking him to look it over and make sure that it fulfilled ML's requirements. Shortly thereafter, I received a call from someone else in the broker's office, advising me that I did not need a QDRO, but simply had to provide ML with a copy of my divorce decree and complete one of their distribution forms.

I attempted to speak with the broker personally, but (surprise, surprise) he has not taken my calls. I believe that either ML or the broker individually should bear responsibility for the $350 legal bill that I incurred due to the erroneous information that the broker gave me about needing the QDRO. I mailed and faxed the broker the legal invoice, requesting that he take care of it ... but heard nothing. As the legal invoice went past due, I decided to go ahead and pay the attorney, but seek reimbursement from ML. Last week I sent a certified letter, along with another copy of the invoice, to the broker and the CEO of ML in New York (as if that'll do me any good), demanding reimbursement by the end of November.

Now, I realize that $350 isn't going to make me or break me, but I don't feel that I should have to pay for something that was said to be a requirement in order to get my ML funds, when it really wasn't a requirement. Bottom line - do I have any recourse against ML and/or the broker? If you were in my shoes and ML remained unresponsive, would you consider an action in small claims court?

Thanks in advance for any advice.


Follow-Up Postings:

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RE: Do I have recourse against broker?

Auntjen,
A) You could normally sue in small claims court... sounds like an open & shut case... however,
B) Since it has to do with an equities broker, your ex probably signed an arbitration agreement that also binded all heirs, assignees, etc. etc.

If #b is the case (most likely,) you merely need to run up THAT flagpole. Call the ML legal dept. and ask for the arbitration procedures. You probably won't even have to get that far, as once they know you're going to be a METHODICAL pain in their butt, all over a measly $350... they'll cough it up, no trouble.

Post Uncle Dave back with the good news!
Dave Donhoff
Just some mortgage guy ;~)


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RE: Do I have recourse against broker?

Know what you want.

Tell them the story, with your reasons as to why you feel that they should pay the fee.

Be courteous.

Be persistent.

Most of which you've done.

Have you asked for an interview with the branch manager? If unavailable, gone to their office and asked to speak to the broker, or, if s/he refuses, the branch manager? Take a book with you, so that, if you're told that those two are busy, you can sit down and wait. Likely they'll see you before the end of the day.

Then go for their arbitration procedure - Dave's probably right: when they realize that you're not going away, they'll at least negotiate, most likely pay the whole thing, to get you out of their hair.

In the light of the egg on their face that many of the large brokerages have been caught with recently, they are trying to improve their image.

Be careful not to sign a paper saying that you accept the result of their arbitration procedure as final - for you want to keep the door open to go to small claims court if the arbitration result is unsatisfactory.

Small claims court doesn't cost you much, and you can add those fees to the amounts that you're claiming. And ML won't want to go there - they'll have to send a high-priced lawyer - which will cost them more than paying you before the court date.

Be careful to take action step by step, to not skip several steps in the procedure, as any one of them can turn out favourably for you.

Good luck.

joyful guy


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RE: Do I have recourse against broker?

Thanks very much, Dave and joyful guy! I'll wait til the end of the month, and if I've gotten no response, I will proceed methodically, as suggested. Here's hoping!


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RE: Do I have recourse against broker?

If he continues to jerk you around, file a complaint with the Securities and Exchance Commission.

Tell him you're going to do that first, however, and see what his reaction is.


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RE: Do I have recourse against broker?

Just an update: I (finally!) received a check for $350 from Merrill Lynch over the weekend. A ML representative called me last week to tell me that they were in the process of cutting the check, and stated that she had talked to the [idiot] broker who told her to "go ahead and reimburse" me, because it was "the right thing to do."

Probably more likely that they didn't want to have to send one of their high-priced lawyers to small claims court, but at any rate, I'm just happy to have been reimbursed.


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RE: Do I have recourse against broker?

Hurrraaayyyyyy!!!!!!


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RE: Do I have recourse against broker?

hey, they're cutting the check--give them the benefit of the doubt about their motivation. There ARE good guys out there, you know. It doesn't encourage good guys if you ascribe cynical motives to them.

Congrats on your reimbursement!


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