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Clients of the Merrill Lynch Phil Scott Team Win $1.2 million FINRA Arbitration Award Against Merrill, including, their Entire Net Out-of-pocket Losses, Interest, Costs and Attorneys’ Fees

This is the SECOND time in the past 6 months where Lax & Neville LLP has won a significant FINRA arbitration award against Merrill Lynch for purported sales practice abuses concerning the Merrill Lynch Phil Scott Team and the Merrill Lynch Phil Scott Team Income Portfolios. In the most recent arbitration, the Merrill Lynch Phil Scott Team recommended that 100% of Claimants’ investible assets be invested in the Merrill Lynch Phil Scott Team Income Portfolios, which consisted of 100% equities. This concentration of equities was patently unsuitable for the Claimants for many reasons, not the least of which, was the fact the approximately 60% of the portfolio was pledged to three different Merrill Lynch loans. Claimants argued that the initial and continued recommendations by the Merrill Lynch Phil Scott Team to invest in the Income Portfolios were made without knowledge and understanding of the collateral requirements of the three Merrill Lynch loans. During the arbitration process, Claimants focused on the Merrill Lynch Phil Scott Team’s blatant disregard of industry and regulatory obligations, and Claimants’ risk tolerances and investment objectives. The FINRA arbitration award against Merrill Lynch consisted of $800,219 in compensatory damages which represented Claimants’ entire net out-of-pocket losses and interest at the rate of 6% per annum from July 26, 2010 through the date the award is paid in full. In addition to the $800,219 award in compensatory damages, the Panel awarded Claimants all attorneys’ fees requested in the amount of $391,474, along with their costs in the amount of $47,339.91. All hearing session fees were also assessed against Merrill Lynch.