NY Comptroller Settles Merrill Lynch Fraud Suit

Thursday, Jan 13, 2011  |  Updated 4:15 PM EDT
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NY Comptroller Settles Merrill Lynch Fraud Suit

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New York Comptroller Thomas DiNapoli says the state worker pension fund has settled its federal securities fraud lawsuit against Merrill Lynch & Co. and two company officials for $4.25 million.

The fund had opted out of a similar class-action suit and negotiated the settlement with Bank of America, which bought Merrill Lynch.

The suit claimed the now $133 billion fund was misled about Merrill Lynch's role in the mortgage-backed securities market that artificially inflated the company's stock value, which plummeted when the exposure became known publicly.

Fund lawyers have filed a separate suit claiming investor losses from the merger between Bank of America and Merrill Lynch.

Bank of America spokesman Bill Halldin confirmed the settlement Thursday. He declined further comment.

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