Probe ‘scape goats’ take revenge

Source: FT

Probe ‘scape goats’ take revenge
By Brooke Masters in New York

Published: May 1 2007 22:24 | Last updated: May 1 2007 22:24

Companies that rushed to co-operate with government probes by quickly firing implicated employees are facing a new threat: arbitration claims filed by employees who say they were unfairly used as scapegoats.

In recent months, arbitrators and courts have handed out multi-million dollar awards to six former employees of Merrill Lynch, AllianceBernstein and Wachovia Securities who were fired during the market-timing scandal and then filed defamation or wrongful termination claims.

The awards are small compared with the enormous settlements these companies had to pay to settle state and federal probes of improper mutual fund trading.

Alliance, for example, has been ordered to pay a total of $5.3m to two former employees, but handed over $800m in penalties and fee reductions to settle with Eliot Spitzer, then New York attorney-general in 2003.




Read more: http://www.ft.com/cms/s/d34be45a-f81c-11db-baa1-000b5df10621.html

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HAHAHA! Take note, Bushco scapegoats!