Merrill Lynch has announced the preliminary settlement of 23 securities class actions related to its research coverage of Internet stocks. The cases allege that Merrill Lynch disseminated overly optimistic research and investment recommendations to garner investment banking business. The settlement is for $164 million.
As discussed in this Los Angeles Times article, the settlements surprised some experts because of Merrill Lynch’s apparently strong legal position. Many of the cases had already been dismissed, although appeals were pending.
As a result of these settlements and prior actions, only 2 of 41 class actions related to Merrill Lynch’s research coverage remain pending. Notably, one of those suits is the Dabit case currently before the U.S. Supreme Court.