Former Merrill Lynch broker awarded $650k

One of the former Merrill Lynch & Co. brokers blamed for selling nearly $14 million in high-risk securities to the City of Springfield received a measure of exoneration earlier this week when an arbitration committee awarded him $650,000 in damages for his firing from the financial advisory firm after the city’s investments went bad.

Merrill faulted brokers Carl J. Kipper and Manuel Choy for selling Springfield the unsuitable investments — collateralized debt obligations, or CDOs, that plunged in value during the subprime mortgage collapse in the summer of 2007 — and fired the brokers. But both Kipper and Choy have said they didn’t realize the securities they’d sold the city were high-risk instruments inappropriate for the municipality’s cash accounts. Part of the problem: the investments weren’t originally labeled as CDOs.


Under a deal brokered by state Attorney General Martha Coakley, Merrill ultimately agreed to reimburse Springfield for its losses.

Kipper responded to his firing by filing a claim against Merrill with the Financial Industry Regulatory Authority, seeking more than $4 million in lost wages, damages, and attorney’s fees. He was ultimately awarded a fraction of that amount — the $650,000 total appears to cover just lost wages and unpaid commissions.

Still, Kipper’s attorney David Marek said his client is “very pleased’’ with the decision, which Marek said could go a long way toward reversing the “bad apple’’ image Merrill tried to paint Kipper with.

“What happened to him was terrible, so he’s definitely hoping that in some way this helps restore his his reputation,’’ Marek said yesterday. “You just hope that something like this helps assure clients that this whole thing wasn’t really his fault.’’

Merrill Lynch spokesman Bill Halldin said the firm stands by its actions with regard to Kipper and Choy, and was “disappointed that the panel made any award give the facts of the case.’’

Halldin did note that the Financial Industry Regulatory Authority’s decision wasn’t a complete victory for Kipper.

“The panel did reject the vast majority of the more than $4 million Mr. Kipper sought,’’ Halldin said, “and denied Mr. Kipper’s request to alter the regulatory filing detailing the reason for his termination.’’

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