New York’s highest court threw out a $99 million award against members of Brazil’s Nasser banking family in a lawsuit by Merrill Lynch & Co. accusing them of high-risk trading activity.
Merrill Lynch sued Nasser family members in April 2008, claiming they defrauded the brokerage out of more than $78 million after engaging in a series of “high risk trades.” Merrill Lynch was acquired by Charlotte, North Carolina-based Bank of America Corp. in 2009.
A lower court entered a default judgment against individual members of the family after a referee determined they had failed to comply with Merrill Lynch’s demands for evidence in the case. An appellate panel in Manhattan upheld the award in April 2012, and the Court of Appeals in Albany threw out the judgment in a ruling dated today, saying the lower court abused its discretion.
“The penalty imposed -- entry of a default judgment against the Nassers, individually -- was not commensurate with the alleged disobedience, i.e., failure to produce documents that Merrill Lynch claimed were in the Nassers’ possession with respect to the Nasser entities,” the Court of Appeals said.
Bill Halldin, a spokesman for Bank of America, didn’t immediately comment on the ruling in an e-mail.
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