Merrill Lynch agreed to pay a $1 million fine for failing to arbitrate disputes with employees about retention bonuses related to its 2009 merger with Bank of America Corp. FINRA alleged that Merrill made brokers sign documents requiring them to resolve disputes about the bonuses in court. Industry rules require brokerages and brokers to resolve most employment disputes in FINRA's arbitration forum. Merrill paid $2.8 billion in retention bonuses structured as loans to more than 5,000 brokers at the time of the merger with Bank of America.  Brokers who leave the firm, or whose employment is terminated before the loan term is over, must return part of the payment. Merrill Lynch structured its retention bonus program to make it appear that its funding came from Merrill Lynch International Finance Inc, an affiliate that is not registered with FINRA. Some brokers then left Merrill, without repaying funds they owed on their bonuses and the brokerage filed more than 90 actions in New York state court (regardless of residency), instead of mandated arbitration before FINRA, to collect those funds.

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