So maybe his reputation wasn’t so damaged after all—or maybe it’s just made a comeback. The former Merrill Lynch sales manager who sued Hydie Sumner and her lawyer Linda Friedman in September of 2006 on grounds that the women damaged his reputation and had him fired was promoted to branch office manager of Southwest Securities’ private client branch in San Antonio, Tex. last week.

Blas Catalani, who was hired at the Texas-based broker/dealer last year, is now leading a team of seven financial advisors and four support people. Catalani is also responsible for recruiting other advisors into the branch, according to the firm. “We think there’s a growing market in [San Antonio] and we’re trying to grow that office,” says Jim Bowman, a spokesperson for the firm. Southwest Securities would not comment on Catalani’s ongoing lawsuit.

In March, Sumner filed a countersuit claiming Catalani damaged her reputation by alleging that she was the reason he was terminated by the firm. Sumner is no stranger to Wall Street lawsuits: In 2004, she won $2.2 million from Merrill in an arbitration hearing that ruled that the firm discriminated against her. It was later ruled that Merrill must re-instate her job at the firm. Calls made to Sumner were not immediately returned. (For more on the Merrill case and similar suits, click here.)

In May, Catalani also sued Merrill for sexual discrimination in federal court saying the b/d terminated him to make room for Sumner. Records show Catalani withdrew those claims early this month but is now pursuing them in NASD arbitration, according to a source familiar with that case. Catalani is on vacation this week, according to a staff person at the branch, and could not be reached for comment.

Catalani’s court complaint alleged that Sumner asked her lawyer to send an email to Merrill management questioning the company’s ethics for employing “a man like Catalani.” After being terminated, Catalani found it “extremely difficult” to find another job in the securities industry and firms that had previously recruited him no longer returned his calls, according to the court complaint. Further, after “great professional and financial loss”—Merrill allegedly doled out Catalani’s client accounts to other advisors after terminating him—he accepted the position with Southwest Securities.

Merrill Lynch declined to comment for this story.