$2.1M award overturned in Merrill case

A Maine court of appeals has overturned a former Merrill Lynch rep’s $2.1 million award, which she had received after suing the firm.
Deborah Galarneau, an ex-Merrill stockbroker, originally sued the New York-based firm in 2005 for defamation, breach of contract and gender discrimination, among other claims.
According to her complaint, Merrill Lynch fired her in January 2004 and then filed a Form U-5 with NASD (now FINRA), saying that she was terminated because of inappropriate bond trading and use of improper time and price discretion.
After her firing, Ms. Galarneau tried getting work as a broker at three other firms and was unsuccessful, due to the accusations on the U-5, she claimed.
Ms. Galarneau won $850,000 for defamation and $2.1 million in punitive damages.
However, Merrill later appealed in September 2006.
Judge Juan Torruella of the U.S. Court of Appeals in Maine supported the original verdict, along with the $850,000 award, but the $2.1 million punitive damage award was overturned.
“Merrill Lynch’s knowledge must have motivated its statement, or its actions must have been so outrageous as to imply malice,” the appeals report said.
“There was no evidence that Merrill Lynch made the statement in the U-5 with the intent to deprive Galarneau of a job.”