Panel awards Ex-Merrill employee $1.6M

An NASD arbitration panel ordered Merrill Lynch & Co. Inc. to pay a former Iranian employee $1.6 million. The employee alleged that his boss at the firm set him up to be fired after discovering his ethnicity, published reports said. The arbitration panel awarded Mr. Zojaji $400,000 in compensatory damages and $1.2 million in punitive damages. According to the panel's findings, Mr. Zojaji had been on a management track at Merrill's branches in suburban Miami before Brian Sepe, his former manager, relegated him to a reduced role after the terrorist attacks on September 11, 2001. In November 2004, Mr. Zojaji was fired on Mr. Sepe's charges that he made unauthorized trades in two clients' accounts and that he broke the firm's privacy policy by allowing his wife to act as a translator during a phone call with one of the clients, who spoke Spanish. After being fired, Mr. Zojaji was discredited on his Form U5, effectively barring him from future employment within the securities industry. Employers file Form U5s with the NASD after they fire their brokers to explain their reason for termination. The ruling comes on the heels of a lawsuit filed on behalf of Majid Borumand, another Iranian who accused the New York-based financial services giant of racial discrimination (InvestmentNews, June 27).