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Compliance September 6, 2007
Merrill Settlement Approved in Biased Research Reports Suits
A $125 million settlement between Merrill Lynch&Co. and investors over the company’s publishing of biased research got federal court approval on Wednesday, Reuters reported.
Reported by Adrien Martin
The lawsuit said that Merrill Lynch and technology analyst Henry Blodget sent out said research during the dot-com boom to garner big investment bank contracts.
The lawsuits were only one of the cases against Merrill that charged such practices. The company agreed earlier this year to pay $39 million to settle three suits brought by mutual fund investors. According to Reuters, the first of the cases alleged misleading research was brought in 2001.
The settlement approved Wednesday covered 23 more suits and amounted to $125 million, plus accrued interest. U.S. District Judge John Keenan awarded the investors lawyers fees amounting to 24% of the settlement fund, or nearly $32 million, as well as about $1.4 million in costs and expenses.
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