My former employer is facing a new class action law suit, and this time I may get to get in on the action. I found the story on a Merrill Lynch page that requires a login, but I can't find it out on the net yet. The suit is on behalf of purchasers of Merrill Lynch stock based on the fact that they really screwed things up by not following industry Chinese Wall rules or their own rules regarding the ratings of securities. There have been multiple suits already by people who bought stocks that were pumped by the firm without a fundamental basis for doing so. That of course has brought the firm lots of bad publicity and hurt the stock. This suit is essentially saying that if they hadn't lied to begin with, then the stock wouldnt be getting hammered right now.
This seems like a gimmie. The firm essentially admitted they screwed up when they settled with the New York Attorney General's office. I only hope that my standing as a former employee and the fact that the shares were purchased in my 401(k) account doesn't affect my standing. Heck, I still know lots of folks who work there. I hope that being employed by the firm doesn't affect their standing in the suit. Employee stock owners got screwed just as much as public and institutional owners.
If any of you Merrill folks would be willing to forward me the official company line on this newest lawsuit, I'd sure appreciate it. I wonder, are they going to fire more folks because investment banking and research apparently collaborated to screw the public? The only reason I have my money still at Merrill is that I know how the system works, and if I ever have a problem I know the strings to pull and the people to turn to for help. You should not have your money there.
Here is the full text of the press release:
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. Announces Class Action Lawsuit Against Merrill Lynch 07/09 1:58 pm (BW) Story 1591 (MER)
WASHINGTON--(BUSINSS WIRE)--July 9, 2002 --
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. Client Sues Merrill Lynch On Behalf of Persons Who Purchased Merrill Lynch Common Stock and Other Securities Between July 3, 1999 and April 8, 2002
On July 2, 2002, an investor represented by the law firm of Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (www.cmht.com) filed a class action suit against Merrill Lynch & Co., Inc. (NYSE:MER) ("Merrill Lynch"), Merrill Lynch, Pierce, Fenner & Smith Inc. and Henry Blodget (collectively, the "Defendants") in the United States District Court for the Southern District of New York, Civil Action No. 02 Civ. 5097, on behalf of all persons or entities who purchased Merrill Lynch securities between July 3, 1999, through April 8, 2002, (the "Class Period").
The complaint alleges that the Defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5, by employing improper business practices which artificially inflated the prices of Merrill Lynch common stock and other securities during the Class Period. More specifically, the complaint alleges that Defendants' improper business practices included issuing a series of false, inflated and/or biased securities analyst research reports concerning the common stocks of several Internet companies for whom Merrill Lynch provided or sought to provide investment banking services, in complete derogation of the "Chinese Wall" that was supposed to separate the firm's research analysis from its investment bankers; failing to adhere to the published securities ratings criteria Merrill Lynch distributed to its clients and other investors; and publicly recommending certain Internet stocks to investors in their research reports despite private misgivings and negative opinions about those stock as reflected in internal e-mails and communications. The complaint further alleges that Defendants manipulated their securities research as part of a larger scheme whereby Merrill Lynch wrongfully linked the compensation of Defendant Blodget and other Merrill Lynch securities analysts to the amount of investment banking business the analysts generated. The complaint also alleges that Merrill Lynch issued several misstatements to investors concerning, inter alia, the integrity of the firm's securities research and analyst practices in reports the firm filed with the SEC and in other public statements. A copy of the complaint can be obtained from the clerk's office of the court or Cohen, Milstein, Hausfeld & Toll, P.L.L.C.
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has significant experience in prosecuting investor class actions and actions involving financial fraud. The firm has offices in Washington, D.C., Seattle and New York and is active in major litigation pending in federal and state courts throughout the nation. You may visit the firm's website at www.cmht.com.
The firm's reputation for excellence has been recognized on repeated occasions by courts which have appointed the firm to lead positions in complex multi-district or consolidated litigation. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. has taken a lead role in numerous important cases on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total over a billion dollars. In addition to Cohen, Milstein, Hausfeld & Toll, P.L.L.C., two other laws firms, Berger & Montague, P.C. (215/875 -3000) and Shapiro Haber & Urmy LLP (617/439 -3939), are also serving as counsel for the plaintiff. The persons from Cohen, Milstein, Hausfeld & Toll, P.L.L.C. identified below are available to answer questions regarding this case.
If you purchased Merrill Lynch common stock during the Class Period, you may move for appointment as Lead Plaintiff on or before Aug. 30, 2002.
If you have any questions with regard to this notice or otherwise, please contact:
Steven J. Toll, Esq. or Katrina Jurgill Cohen, Milstein, Hausfeld & Toll, P.L.L.C. 1100 New York Avenue, N.W. West Tower, Suite 500 Washington, D.C. 20005 -3964 Telephone: 888/240 -7775 or 202/408 -4600 E-mail: stoll@cmht.com or kjurgill@cmht.com
Steven J. Toll / Katrina Jurgill 888/240 -7775 or 202/408 -4600 stoll@cmht.com / kjurgill@cmht.com 13:58 EDT JULY 9, 2002
Update: Here is the response that I received from Cohen, Milstein, Hausfeld, & Toll, P.L.L.C.
Dear Jonathan,
Thank you for your email regarding our case against Merrill Lynch, Pierce, Fenner & Smith, Inc., and Henry Blodget. If you bought MER securities between 7/3/99 and 4/8/02, you will automatically be included as a class member in this action, and need take no further action at this time. You are
eligible to participate in this action even if you were not a client of Merrill Lynch.
Be sure to keep track of your documentary proof of purchase of MER securities for this time frame. If you still own MER securities, you can continue to hold or sell it as you see fit - it won't affect your ability to participate as a member of the class.
As a class member, no action on your part is required and there are no out of pocket expenses or costs. If class counsel is successful in making a recovery on behalf of the class, class members will be notified by mail and would then need to complete a proof of claim form to receive a pro rata share of the recovery. Class counsel would at that time petition the court for a recovery of fees and expenses, to be paid from the fund created on behalf of the class.
Please note that all of this may occur after the settlement of the case, which normally happens 1-3 years from the filing of the lawsuit, and only if the case is successful.
If you estimate your losses to be over $100,000 and you would like to be contacted with information about the possibility of being a lead plaintiff for the class, please e-mail me and I can send you the certification form you would need to complete in order to seek lead plaintiff status.
Thanks again for contacting me and please feel free to be in touch with any additional questions. Additional information about this case and other Merrill Lynch cases, including the complaints and specific allegations, can be found at our website: www.cmht.com.
