Milgram sues Merrill Lynch
TRENTON, N.J. (Legal Newsline) - New Jersey Attorney General Anne Milgram has filed a lawsuit against Merrill Lynch for allegedly misleading stock information and violating the state's good fair and fair dealing law.
The suit also alleges Merrill Lynch offered one particular investor a better exchange rate than the others, despite the firm's policy that all investors would be treated equally, according to Milgram.
The complaint charges Merrill Lynch and its successor entity, Bank of America Corp., with breach of contract, negligent misrepresentation and breach of the covenant of good faith and fair dealing.
"The State relied on Merrill Lynch to provide the whole story and the company failed to do so," Attorney General Milgram said.
According to the complaint, Merrill Lynch distributed inaccurate and incomplete financial reports after the State had purchased $300 million of "preferred" stock, which would have returned a nine percent dividend.
In July 2008, Merrill Lynch sought to reset the terms of the stock option, and the State agreed.
However, according to the complaint, officials with Merrill Lynch had not fully disclosed the different options under the terms of the new agreement but still offered other investors the original deal.
The complaint goes on to allege at least one investor received a preferential deal that included a more favorable exchange rate and continued retention of preferred stock with a dividend.
"This case is about holding Merrill Lynch accountable for its conduct, and for recovering important investment funds on behalf of the citizens of New Jersey," Milgram said.