Merrill Lynch Gives 75-year-old Broker Walking Papers After 49 Years at Firm
Nearly 50 years of service is no guarantee of future employment at a brokerage firm, observers are warning after the firing of 75-year-old Marshall C. Sale in August.
Sale, who lives in Santa Fe, New Mexico, confirmed that Merrill Lynch fired him in late August after 49 years at the firm. It accused him of exercising discretion in a non-discretionary account and of “selling away,” or conducting mutual fund transactions outside of the firm, “resulting in a loss of management’s confidence,” according to regulatory records.
Sale, who joined Merrill in Beverly Hills in 1967 when Lyndon Johnson was president and “Gomer Pyle, USMC” and “Bewitched” were big TV hits, declined to discuss the specific allegations.
“I cannot say anything because of my attorney’s advice,” he said in a phone interview, noting that he is researching examples of other elderly brokers who lost their jobs. “There will be more to come.”
A spokesman for Merrill Lynch declined to comment.
The case, however, could be a warning to other brokers who may have a false sense of security because of their duration at a firm, said George Miller, an employment lawyer at Shustak Reynolds & Partners in San Diego, who frequently represents brokers.
“In some cases—and I’m not saying this is the case here—when you have someone who has been in the industry so long, there becomes a sense that the rules don’t apply the same to them,” said Miller, who reviewed Sales’ Central Registration Depository records but is otherwise unfamiliar with the Sale event.
Michael Wasserman, a recruiter in California who knew Sale but was unaware of his termination, said Merrill’s action underscores firms’ increasing sensitivity to being held responsible for potentially problematic activity by brokers.
“They’re digging into histories more, and they’re surveilling more,” he said.
Weighing against that trend, to be sure, is the fact that retail brokerage is an aging industry with the average broker in his or her mid-50s. Firms historically have taken a laissez-faire approach to large producers who cross certain lines, compliance officials often say, and they certainly do not want to take actions that could antagonize older advisors who have built up large books of business.
Rather than firing advisors who may be slowing down, many are polishing up “sunsetting” payout programs and other incentives to encourage them to gradually move their books of business to younger colleagues.
“There might be sort of an inclination to push out older advisors because their books are shrinking, or they are not as actively managing their clients’ assets,” said Miller. “I wouldn’t go as far to say there’s a pattern or practice of doing that, but it’s an issue facing the industry as a whole right now.”
Most states permit employers to fire employees “at will,” as long as it is non-discriminatory (age, race, gender, etc.), conforms with the employer’s actual or implied contract with an employee and is otherwise lawful. Well-established firms such as Merrill and its owner, Bank of America, are undoubtedly very careful about terminations that could trigger age-discrimination claims, said lawyers and headhunters who had no knowledge of the particulars in the Sale firing.
For his part, Sale insists that though his work with clients in recent years is more of an avocation than a profession, he has lost none of his energy and was not ready to retire.
“I’m what you call a senior who loves his business,” he said.
Even lawyers who represent employees in class-action suits are cautious about successfully prosecuting age-discrimination suits. “It’s unusual [for] firms to terminate people for bogus compliance reasons at older ages,” said Linda Friedman, an attorney at Stowell Friedman in Chicago who has successfully pressed race-bias and gender-bias cases against Merrill and other large firms.
Throughout his long tenure at Merrill, Sale accumulated two disclosure events from customers, according to his BrokerCheck record. One that sought $281,000 for alleged misrepresentation and unsuitable investment recommendations was settled in 2011 for $90,000.
A 2009 case citing misrepresentation in the sale of closed-end fund Auction Rate Securities resulted in a $150,000 award that was paid in full by Merrill, according to Sale. The amount represented the par value of the bonds that Merrill repurchased from the client as part of its resolution of the broad ARS market crisis, he wrote in his BrokerCheck comment on the award.