Bank of America Corp. (BAC)’s Merrill Lynch unit was ordered by a Brazilian court to pay Alexandre Caiado 150,000 reais ($76,500) to compensate the former banker for five days he spent in jail over allegations tied to his work at the company.
Sao Paulo’s 26th labor court said it was “incontrovertible” that the imprisonment was because of his position as a junior financial consultant at Merrill Lynch, now a division of Charlotte, North Carolina-based Bank of America, according to a document published in the nation’s official Gazette earlier this month. Caiado wasn’t convicted of any wrongdoing.
Caiado, 42, was jailed in June 2006 in a Curitiba federal prison over allegations he helped Merrill’s clients make illegal overseas money transfers. His arrest was part of an investigation that resulted in indictments of 18 bankers at Credit Suisse AG and UBS AG in Brazil. Merrill fired Caiado nine months later, saying the dismissal was part of a restructuring.
“It’s inevitable to conclude the prison and the police investigation caused the claimant a moral damage,” according to the court document. “It hasn’t been proved in the legal proceedings the claimant had acted on his own will leading to his imprisonment by Federal Police.”
Bank of America declined to comment on the case. Caiado said in an interview that he appealed the unanimous decision to Brazil’s superior labor court, asking for a bigger payment.
Bill Halldin, a Merrill Lynch spokesman, said in 2010 that the firm wasn’t responsible for the criminal charges against Caiado, adding that “this individual was arrested on matters that didn’t involve any activities related to Merrill Lynch.”
Caiado said he won a separate labor claim and lost a third in Brazil against Merrill Lynch, which he is appealing. He declined to be more specific because the cases are confidential.
“It was proved the reason for my imprisonment was related to my activities at the firm,” said Caiado, who is now chief executive officer of Gold Sea Participacoes SA, a real-estate company based in Curitiba.
The decision may set a precedent for other cases, said Viviane Castro Neves Pascoal M. Dal Mas, a partner at law firm Castro Neves, Dal Mas, which represents Caiado.
“This decision may create jurisprudence in Brazil,” Dal Mas said in a telephone interview today. “It may have a global effect.”
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