TRENTON, N.J. (Legal Newsline) - New Jersey Attorney General Jeffrey Chiesa announced a $45 million settlement on Friday with Merrill Lynch & Co. to resolve allegations that it breached a contract related to a state stock purchase in 2008.
Merrill Lynch agreed to pay $45 million to the New Jersey Division of Investments to resolve the litigation. The state's Division of Investments manages assets for New Jersey's pension funds.
Merrill Lynch allegedly breached a provision in a July 2008 contract in which the state exchanged its investment in Merrill Lynch preferred stock for Merrill Lynch common stock. The state filed a lawsuit in 2009 in New Jersey Superior Court in Hudson County. The lawsuit alleged Merrill Lynch distributed inaccurate and incomplete financial reports, understated financial risks and violated generally accepted accounting principals.
Following several years of litigation, Merrill Lynch agreed to settle the matter out of court with the state.
"This is a fair and equitable outcome, and we are pleased to be recovering a substantial amount of dollars on behalf of New Jersey taxpayers," Chiesa said. "I also want to acknowledge Merrill Lynch for its readiness to seek a resolution that avoids further litigation."
Under the terms of the agreement, Merrill Lynch neither admits nor denies liability in the matter.