Fund lawsuit vs Merrill Lynch moving forward

The lawyer for Commonwealth retirees, who sued the NMI Retirement Fund’s former investment consultant Merrill Lynch, described as “good news” that the case has been ordered for arbitration.

Arbitration is a legal technique for the resolution of disputes outside the courts. It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.

Atty. Michael Dotts represented retirees Mariano Taitano, Roman Tudela, and Patricia Guerrero who filed the former investment consultant alleging that the firm had harm the pension agency when it provided “bad” advices to the board of trustees, resulting to millions of losses in its investments.

“After more than two years of struggling with the Retirement Fund, the case against Merrill Lynch is finally moving forward. The case is now heading to arbitration,” Dotts told Saipan Tribune in response to the recent order issued by Judge Perry Inos on the case.

In a two-page order by Inos, he stated that “all claims of the individual plaintiffs and the Fund against Merrill Lynch are hereby compelled to arbitration to be conducted by the Financial Industry Regulatory Authority [FINRA] and this matter stayed.”

Dotts said because of the order, the case Merrill Lynch filed in federal court will be dismissed and Merrill Lynch will turn over documents to his clients. The Fund, he said, will also provide documents to the plaintiffs who will then arbitrate against the former consultant.

“The order from Judge Inos was the result of a stipulation and is very good news. My clients believe that Merrill Lynch injured the Fund and now they are going to get the chance to prove it. We would have preferred a jury to decide the case rather than an arbitration but at least with an arbitration this case will move much faster,” Dotts said.

Attorneys Brad Huesman and Christopher Timmons represented the board of trustees of the Fund during the hearing while attorneys Sean Frink and Peter Fruin appeared on behalf of Merrill Lynch.

The three retirees, all members of the defined benefit plan of the pension agency, sued Merrill Lynch for negligence and malpractice for giving “bad advice” to the Fund’s board of trustees in 2007. Also named defendants in the case are the Fund’s board of trustees and several unnamed individuals.