Massachusetts Charges Merrill Lynch With Fraud in ARS Dealings
By Securities Law on Aug 1, 2008 | In Regulatory Actions
Massachusetts Secretary of State William Galvin filed a complaint against Merrill Lynch on July 31 alleging that the firm defrauded thousands of customers who bought auction-rate securities. Similar to a complaint Galvin filed against UBS (UBS) in June, the 80-page action is based on dozens of internal e-mail messages sent by Merrill executives. Galvin demanded that Merrill buy back all its customers' securities at face value and pay an unspecified fine. The complaint says the charges spring from Merrill "creating and implementing a sales and marketing scheme which significantly misstated not only the nature of the auction-rate securities, but also the overall stability of the auction market, resulting in thousands of investors being abandoned with illiquid investments."
For more information on this subject contact securities attorneys, Michaels, Ward & Rabinovitz, LLP.
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