No White Flag Yet From Gabelli & Co.

EVER COMBATIVE MARIO Gabelli is taking on the National Association of Securities Dealers. The money manager has initiated the rare step of filing a court appeal to overturn an NASD arbitration panel decision--an award of some $850,000 to a former employee. This comes despite Rye (N.Y.)-based Gabelli & Co.'s signing an agreement last year to abide by the panel's decision.

The fight pits Gabelli against Elizabeth Bramwell, who racked up good returns heading his Gabelli Growth Fund before leaving in February, 1994, to start her own outfit, Bramwell Capital Management. After sorting out each side's welter of claims and counterclaims, the arbitrators gave the most to Bramwell. She, for instance, had to return $192,000 she had received in advances, which she says was really a bonus for past service.

An NASD spokesman says it's "extremely rare" to appeal an arbitration decision in court. To win, the appealing party must prove gross procedural deficiencies, such as biased arbitrators, he says. Gabelli lawyer Jeffrey Liddle of New York's Liddle & Robinson admits the appeal is "an uphill battle." But he says his client is justified because the NASD panel based its findings on a flawed reading of a Bramwell-Gabelli employment pact.

What about the Gabelli agreement to accept the NASD ruling? Says Liddle: "That doesn't say we must give up appeal rights."

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