Fired Multi-Million-Dollar Merrill Broker Joins Oppenheimer
Former Merrill Lynch broker Eric Bartok, a $3-million-plus broker at a branch in Norfolk, Virginia before he was fired in July, has found a new home.
Reached at the branch, Bartok declined to comment on his move, his job search or whether he is challenging his termination.
A Merrill spokesman declined to comment on Bartok’s dismissal.
The advisor led a team at Merrill that was overseeing around $1.1 billion in client assets and that collectively generated $10 million in annual revenue, according to people familiar with the practice and to the Forbes ranking. His teammates remain at Merrill Lynch.
The dismissal of such a substantial broker illustrates firms’ growing sensitivity to conduct issues that could potentially raise legal or regulatory concerns, they said.
In Merrill’s U5 regulatory filing on Bartok’s July 23 discharge, the firm attributed it to “conduct including submission of inaccurate expense reports for reimbursement, submission of inaccurate client reviews and interactions with third-party product providers inconsistent with firm policy.”
Merrill in recent years has disciplined a growing number of advisors for expense-account violations regarding “business development accounts” that deduct money pretax from brokers’ pay and that are awarded as perks. (The complexities of filing for reimbursement and declaring legitimate expenses has tripped up many brokers, leading Merrill to require its brokers to take an online course on managing the BDAs.)
A person familiar with the termination said that Bartok may have inadvertently sought reimbursement for costs related to an event that a wholesaler had paid for.
He and other sources also said that the firm may have escalated the BDA issue as retaliation for behavioral issues. Bartok had been complaining to managers about certain compensation and customer segmentation policies, and may have exacerbated issues by telling an associate at a meeting to “shut up,” they said.
Bartok’s lawyer, Michael Taaffe of Shumaker, Loop & Kendrick, did not return a request for comment on the termination or whether Bartok will seek to file a wrongful termination claim against Merrill.
The U5 language and termination impeded Bartok’s job search, two people said, particularly at wirehouses. In addition to interviewing with Oppenheimer, he met with Philadelphia-based Janney Montgomery Scott, said a person familiar with his search. A spokesman for Janney did not immediately return a request for comment.
New York-based Oppenheimer has said that it is interested in selectively hiring experienced brokers, even as its brokerage force has fallen by 14% over the past three years partly as a result of culling less productive brokers and those with disciplinary issues. It ended the second quarter with 1,036 brokers, down 47 from 12 months earlier and by 163 from June 30, 2016.
“We are focused on growing our private client and asset management businesses through strategic additions of experienced financial advisers in our existing branch system…as well as deploying our capital for expansion through targeted acquisitions,” Oppenheimer said in its second-quarter earnings filing with the Securities and Exchange Commission.
An Oppenheimer spokeswoman said she could not immediately comment on Bartok’s hire.