In the category of “Don’t try this at home” we have Steven Mandala. According to an article in Investment News, Mr. Mandala significantly overstated his earnings when negotiating with Merrill Lynch to join the firm. IN wrote that he said he earned $765,000 in a year when his true earnings were $100,000.
So what did he do with his upfront money? Well, he bought a Ferrari (in his father’s name), for which I salute him. Unfortunately, I think his resignation from Merrill Lynch, now owned by Bank of America, within two months of joining the firm might have sent up a red flag. But he clearly made someone angry.
Usually the upfront loan cases, sometimes called EFLs (“Employee Forgivable Loans”) or Transitional Compensation Agreements, go to arbitration. I am handling a few right now. It’s rare that the firm goes to the prosecutors. But it appears that Merrill did and now Mr. Mandala won’t have to worry about arbitrating the claims. Instead, he’s going to be selecting a bunk in the big house.
What can we learn from this boys and girls? How about – DON’T LIE TO PROSPECTIVE EMPLOYERS. I think that about sums it up.
That’s the view of one Lawyer from Jupiter, Palm Beach County, Florida, I’m Ferrari-less Marc Dobin.