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A decade ago, Merrill Lynch was exposed for abusing its clients with tainted research it was peddling.

Internal Merrill emails showed at the time that the firm pushed technology stocks on its customers. All the while, it internally viewed the stocks as "pieces of junk" and "pieces of s-t." Merrill's actions led to a $1.4 billion regulatory fine for the industry and massive litigation payouts.

An arbitration panel's $10.2-million decision against Merrill this month shows that not much has changed in the past ten years at the firm. But now, Merrill Lynch's management has moved on from abusing its clients to heaping scorn on its own departing brokers.

Internal emails from 2002 revealed the extent of Merrill Lynch's earlier misconduct. Now comes the remarkable arbitration ruling against Merrill Lynch in favor of two former brokers, Meri Ramazio and Tamara Smolchek. Both left Merrill Lynch in November 2008, just two months after it was acquired by Bank of America (NYSE:BAC), to work for Merrill competitor Morgan Stanley (NYSE:MS).

On their way out the door, the brokers wanted their deferred compensation, worth millions, to vest. In a neat turn of corporate treachery, Merrill simply hasn't allowed such vesting to occur. The arbitration panel wrote that it "was shocked that although over 3,000 Financial Advisors left the employ of [Merrill] after [the Bank of America deal], not one claim has been approved for vesting for 'Good Reason' under the Deferred Compensation Programs."

Plainly, Merrill Lynch does not want to hand over the deferred comp that rightfully belongs to many ex-brokers. In fact, the Merrill Lynch deferred compensation committee was nothing but a "sham committee that did nothing more than rubber stamp denials," according to the ruling.

And this is not chump change. The "zero dollar payout" plan was a far cry from Merrill Lynch's own analyses "that indicated anywhere from hundreds of millions to several billion dollars in potential liability," the panel wrote. And this was not some backwater committee. Senior management played a role in denying deferred compensation to former brokers, the Finra award states.

Merrill Lynch, of course, wants no part of this $10.2 million arbitration award. It immediately moved to have the award vacated "on the basis of the panel's handling of this matter, limits that were imposed on our ability to present our case and the failure of the panel's chair to disclose important information about conflicts of interest," a Merrill Lynch spokesman told Catilin Nish of Dow Jones.

Not only did Merrill Lynch's policy likely cheat thousands of former employees out of millions, the firm's conduct during the arbitration hearing was borderline thuggish. For example, during a dispute over medical records, although the panel decided they could not be entered as evidence, Merrill Lynch attorneys demanded the records be entered anyway. "Particularly, the Panel did not appreciate the waving of the document clearly headed, in large bold letters…for the purpose of intimidating the witness with a document they knew was inadmissible into evidence," the arbitrators wrote.

Some firms just don't get it. And the Charging Bull of Wall Street, Merrill Lynch, is certainly one of them.

Disclosure: Zamansky & Associates are securities attorneys representing investors and brokers in arbitration and federal and state litigation against financial institutions including Merrill Lynch and Bank of America.

Source: Merrill Lynch Eats Its Own