A US arbitration panel has awarded $14 million to three ex-Merrill Lynch fired in a trading scandal. The award includes $12.5 million fo...

A US arbitration panel has awarded $14 million to three ex-Merrill Lynch fired in a trading scandal. The award includes $12.5 million for lost income, as well as pain and suffering that resulted from what the arbitrators ruled was defamatory action against the brokers who have not been able to find work on Wall Street since Merrill went public about their alleged market abusive trading. The three were fired by Merrill in 2003, after a trader at hedge fund Millennium Partners admitted "late trading" of mutual funds after the 4 pm Eastern-time cut-off. Regulators ruled such trading harmed long-term investors. Merrill was subsequently fined $13.5 million by regulators for failing to supervise the New Jersey-based brokers who regulators asserted assisted Millennium to carry out the late mutual-fund trades. Merrill publicly denounced the three brokers, in an attempt to curry favour with the regulators, saying they acted without authority and against the firm’s policy by allowing Millennium to trade rapidly in mutual funds, a practice known as market timing. This is different from late trading. It is not always illegal although it sometimes violates the terms of the funds. The three brokers asserted that Merrill endorsed their trading strategy. Christopher Chung and William Savino were awarded $4.5 million each and Kevin Brunnock was awarded $3.5 million. They will share around $1.6 million plus back interest in money Merrill promised under employment contracts, and their regulatory records will be changed to reflect their termination "was not for cause." Merrill was looking for the group to pay back about $2 million in advance bonuses they were given but this was rejected by the arbitrators. But Merrill has appealed against the award, saying: "The panel's decision was wrong and goes against the best interests of investors, who deserve clear explanations as to why a financial advisor was terminated. We will work to see that the decision is reversed as soon as possible."