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Securities
Breach of Contract
Breach of the Implied Covenant of Good Faith and Fair Dealing; Fraud

Rosen Capital Partners LP, Rosen Capital Institutional LP v. Merrill Lynch Professional Clearing Corp.

Published: Sep. 24, 2011 | Result Date: Jun. 30, 2011 | Filing Date: Jan. 1, 1900 |

Case number: 09-03094 Arbitration –  $63,655,200

Facts

Rosen Capital Partners LP and Rosen Capital Institutional LP (collectively, Rosen) entered into arbitration with Merrill Lynch Professional Clearing Corp., regarding unexpected margin calls and a trading freeze, which caused losses in two hedge funds.

Contentions

CLAIMANT'S CONTENTIONS:
Rosen alleged breach of contract, breach of good faith and fair dealing, as well as breach of reasonable commercial standards of fair dealing, fraud, and negligence.

RESPONDENT'S CONTENTIONS:
Merrill Lynch denied the allegations, asserting various affirmative defenses.

Damages

Rosen sought $77.7 million in damages.

Result

The arbitration panel awarded Rosen $63,665,202 in compensatory damages plus prejudgment interest of 9% accruing from Oct. 7, 2008.

Other Information

ARBITRATORS: Arthur T. Berggren, Holly Banafsheh, Katharine R. Coleman.


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