Merrill Lynch to pay Va $1.37M settlement

AP News
Posted: Dec 14, 2009 11:51 AM

The Virginia State Corporation Commission says Merrill Lynch is paying nearly $1.37 million to settle allegations that investors were misled about the safety of the auction-rate securities market.

The SCC finalized Virginia's participation in a global settlement involving the firm.

Merrill Lynch was required to confirm that it has repurchased auction-rate securities from its clients as part of the settlement.

Officials say that auction-rate securities were marketed and sold to investors as safe, liquid, and cash-like investments. But they say the securities were actually long-term investments subject to a complex auction process that failed in early 2008.

The settlement stems from a multistate task force of state regulators.