Susan Heuer Bazelides, a Forbes top-ranked FA, claims that her employer, Merrill Lynch, and its outside lawyers "threw her under a bus" at a Finra hearing to resolve a dissolution dispute with her partner in their $3 billion assets under management Houston-based team, according to a new federal lawsuit.
Heuer Bazelides, a 32-year Merrill Lynch veteran who is 70 years old and still works at the wirehouse, according to BrokerCheck, also alleges Merrill failed to follow its team dissolution policies and to defend her against the allegations her former team member, FA Patricia Wenzel, filed against her in Texas state court.
Merrill Lynch and its lawyers sought to avoid embarrassing public disclosures about Cuban-native Wenzel’s allegations that the wirehouse has discriminated against her on the basis of race and imposed “onerous working conditions,” the lawsuit alleges.
As a result, Heuer Bazelides alleges they gave Wenzel, a 25-year industry veteran who has worked at Merrill Lynch for eight years and remains an FA there, according to BrokerCheck, more than her rightful share of the two women’s joint client roster.
“Merrill Lynch became extremely concerned with regard to having to proceed in state court on these volatile issues,” Heuer Bazelides’ lawsuit states.
A spokesperson for Bank of America, which owns Merrill Lynch, said Heuer Bazelides' allegations have no merit.
Heuer Bazelides’ lawsuit also names Janell Ahnert, now with the Birmingham, Ala. office of labor law firm Littler Mendelson, who represented Merrill Lynch when she was with Bressler Amery & Ross. Neither Arnert or a named partner from Bressler Amery returned a request for comment for this story.
But Heuer Bazelides' new lawsuit and the related litigation that preceded it underscore for all FA teams the importance of negotiating dissolution terms on which all members wholeheartedly agree.
Heuer Bazelides and Wenzel joined to form Heuer Wenzel & Associates in 2012. Their Team Heuer-Wenzel agreements, sanctioned by Merrill Lynch, required that if a dissolution occurred each team member would take clients they had prior to the formation of the team. Others would be divided based on a percentage of each member’s production credits at the time of the breakup, according to the new lawsuit.
In 2018, the two women began to negotiate a dissolution of the Heuer-Wenzel team.
The team had acquired new accounts since its inception through “spinoff personal accounts from the primary 401k accounts,” and those were the subject of disputes between the two FAs, Heuer Bazelides’ lawsuit states.
As they were negotiating how to sort those out, Wenzel lodged what Heuer Bazelides’ lawsuit alleges was “a frivolous complaint” with Merrill Lynch’s HR department that Heuer Bazelides was “somehow ‘bullying’ her.”
Heuer Bazelides denies the claim and her lawsuit states that no evidence was found by HR to support it.
In September 2018, Wenzel filed a lawsuit (which has since been nonsuited) in a Texas state court naming Heuer Bazelides and Merrill Lynch as defendants.
In that lawsuit, Wenzel alleged Heuer Bazelides misled her about their initial team agreement. Wenzel’s claims included breach of contract against Heuer Bazelides and fraud against Heuer Bazelides and Merrill Lynch.
According to Heuer Bazelides’ federal lawsuit, Wenzel also made additional related claims of discrimination and onerous working conditions. Notably, those claims are not included in the petition Wenzel filed with the Texas state court.
Merrill Lynch wanted to resolve the dispute with Wenzel at Finra and also enter into a joint defense agreement with Heuer Bazelides, which would mean its outside counsel, Ahnert and lawyers from Bressler Amery, would represent Heuer Bazelides, according to her lawsuit.
In November 2018, the two FAs and Merrill Lynch lawyers engaged in Finra administered mediation. At that point, Merrill Lynch representatives and a Bressler lawyer told Heuer Bazelides that she would be “on her own” if she didn’t agree to a mediated settlement, Heuer Bazelides alleges in her lawsuit.
Heuer Bazelides’ lawsuit alleges that in the mediation, Merrill Lynch’s lawyers used her assets to appease Wenzel and get her to drop her discrimination related claims,
“Merrill Lynch was deathly afraid of Wenzel’s discrimination claims since she is a Cuban and a woman,” the lawsuit argues.
“Adding insult to injury,” the lawsuit states, Merrill Lynch has downgraded the size and quality of Heuer Bazelides’ office.
Meanwhile, Wenzel filed another lawsuit, still pending, in May of this year in Texas state court against her former teammate and Merrill Lynch.
In that lawsuit, Wenzel alleges Merrill Lynch and Heuer Bazelides breached a contract because they have not followed through with an addendum to the mediated settlement by giving her all the accounts she negotiated to receive, even though she held up her part of the pact.
Both Heuer Bazelides and Merrill Lynch have denied those allegations.