NY Comptroller Settles Merrill Lynch Fraud Suit

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.

Copyright AP - Associated Press
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