Merrill facing NY lawsuit over securities sale
Monday, 18 August 2008
NEW YORK, Aug 17 (AP) New York Attorney General Andrew Cuomo said Friday he sent a letter to Merrill Lynch & Company notifying the investment bank that his office will file suit against it imminently as part of an investigation into the collapse of the auction-rate securities market.
"We have been trying to resolve the matter," with Merrill, Cuomo said during a conference call with reporters. Cuomo said he has not been able to reach a satisfactory agreement with the bank.
The letter sent to Merrill, which was given to reporters by Cuomo's office, is similar to one Citigroup Inc. received before settling with the attorney general. Cuomo is one of several regulators investigating whether financial companies misled investors in the auction-rate securities market; officials from several other states and the Securities and Exchange Commission have also been involved in negotiations with the big banks.
Merrill said in a statement it was surprised to receive a letter about potential legal action, noting it has held discussions with regulators since it announced a voluntary repurchase plan.
"We anticipated further talks," Merrill said in the statement.
The expected lawsuit comes a week after Merrill said it would voluntarily repurchase auction-rate securities from customers. Merrill said it would buy back securities between January 15, 2009 and January 15, 2010.
"We have been trying to resolve the matter," with Merrill, Cuomo said during a conference call with reporters. Cuomo said he has not been able to reach a satisfactory agreement with the bank.
The letter sent to Merrill, which was given to reporters by Cuomo's office, is similar to one Citigroup Inc. received before settling with the attorney general. Cuomo is one of several regulators investigating whether financial companies misled investors in the auction-rate securities market; officials from several other states and the Securities and Exchange Commission have also been involved in negotiations with the big banks.
Merrill said in a statement it was surprised to receive a letter about potential legal action, noting it has held discussions with regulators since it announced a voluntary repurchase plan.
"We anticipated further talks," Merrill said in the statement.
The expected lawsuit comes a week after Merrill said it would voluntarily repurchase auction-rate securities from customers. Merrill said it would buy back securities between January 15, 2009 and January 15, 2010.