Jailed former Merrill broker must repay bonus

Reuters News
Posted: May 23, 2011 11:23 AM
Jailed former Merrill broker must repay bonus

NEW YORK (Reuters) - A former Merrill Lynch broker who is serving time in prison for theft must repay more than half a million dollars he received as part of a recruiting bonus, an arbitration panel has ruled.

Steven Mandala joined Bank of America Corp's Merrill Lynch in New York City in April 2009. In his employment application, he lied about his annual compensation at his previous firm and gave Merrill Lynch false documents to support his claims, according to Financial Industry Regulatory Authority (FINRA) filings.

A FINRA arbitration panel on May 19 said he must repay the remaining $360,000 plus interest of $25,000 and attorney fees and costs of $47,000. It later posted the decision on its website.

Mandala received a recruiting bonus based on his falsified compensation of $780,000. In June 2010, Mandala plead guilty to grand larceny and was sentenced to serve between two and six years in prison.

Merrill Lynch has recovered $420,000 from selling Mandala's property, including a Ferrari he bought with the bonus, according to court documents.

"We are very pleased with the decision," said a Merrill Lynch spokesman.

(Reporting by Helen Kearney. Editing by Robert MacMillan)