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William A. Gibbs III. v. Merrill Lynch, Pierce, Fenner & Smith - 2/7/2002

Case Summary: Our client, William Gibbs, served as a financial consultant in Merrill Lynch's Brunswick, Georgia branch office. He left Merrill Lynch to join PaineWebber. Upon his departure, Merrill Lynch filed with the National Association of Securities Dealers a Form U-5 Uniform Termination Notice for Securities Industry Registration, which he believed was defamatory. Mr. Gibbs sued Merrill Lynch following his departure, alleging that the firm had interfered with his account relationships during his transfer to PaineWebber. The NASD arbitration panel hearing his case initially dismissed the Form U-5 libel claim in December 1998, on Merrill Lynch's motion to dismiss, without ever holding an evidentiary hearing. Mr. Gibbs appealed that award to the United States District Court for the Northern District of Georgia, and on January 28, 2000, the District Court vacated the award and ordered the panel to hold an evidentiary hearing on the merits of the libel claim. Contrary to the District Court's Order, however, the panel on March 13, 2000 again dismissed the libel claim, without ever holding the evidentiary hearing that the Court ordered, and misrepresented in its award that it had held such a hearing. Mr. Gibbs appealed again to the District Court, and in a March 29, 2001 Order, the Court again vacated the award dismissing the libel claim, and directed that a "new" panel hold an evidentiary hearing on the merits of the claim. Merrill Lynch appealed to the United States Court of Appeals for the Eleventh Circuit, which affirmed the District Court's Order on February 7, 2002. It is virtually unprecedented for a federal court to vacate an arbitration award, and even more so for a court to vacate two awards in the same case. Ultmately, in August 2003, a NASD panel denied Mr. Gibbs' claim after a two-week arbitartion hearing in July 2003.

Read the District Court's March 29, 2001 Order Here

Read the Eleventh Circuit's Order affirming the District Court's Order Here

Lawyer(s):
Jeffrey L. Liddle
Ethan A. Brecher




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