A Financial Industry Regulatory Authority arbitration panel has ruled in favor of Merrill Lynch and one of its financial advisors in a claim brought against the firm accusing it of negligence.

The Amended and Restated Julian I. Stoopler Living Trust filed a claim in July 2020 accusing Merrill of negligence, breach of fiduciary duty and breach of contract in relation to “investments in primarily American Airlines Group (“AAL”) common stock,” according to an award document the industry’s self-regulator published on Tuesday.

The trust sought $20 million in compensatory damages, interest, costs, filing and hearing fees and any other relief deemed appropriate by the arbitrators, Finra says.

Merrill denied the allegations and requested the dismissal of the claims as well as the expungement of any reference to the matter from the record of Steven Davidson, who was not named in the claim, according to the award document.

Davidson, who’s been with Merrill since beginning his career in the financial services industry in 1986, has a customer dispute from July 2020 alleging “unsuitable investment recommendations from December 2016 until February 2020,” according to BrokerCheck. The dispute was settled for $595,000, and Davidson wrote in the broker comment section on the matter that he denies the allegations of wrongdoing.

“The firm settled this matter to avoid the cost of litigation and the Financial Advisor did not contribute monetarily towards the settlement,” he wrote.

In the Finra arbitration case, the arbitrators write that they took note of the settlement and considered the amount of payment, recommending the expungement of the matter from Davidson’s record.

The arbitrators also ruled that the trust’s claim, allegation, or information is “false” as well as “factually impossible or clearly erroneous,” according to the award.

The trust’s account, according to the arbitrators, had a high margin balance when it was transferred to Merrill from Aegis Capital Corp. Davidson, meanwhile — who didn’t receive any compensation from the margin account — suggested a hedging strategy to the trust, as well as the sale of AAL stock, according to the award document. However, the “claimant, an experienced financial advisor [sic] refused all recommendations,” the arbitrators wrote.

The panel assessed $750 of the hearing sessions fees to the trust and $2,250 to Merrill.

Financial Planning first reported the award.

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