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Merrill Accused of Securities Fraud

By Mark H. Astarita, Esq.

How many hits can a brokerage firm take? Merrill was at the center of the research analyst scandal just a few years ago, and now it looks like they may be center stage in the ARS scandal.According to the Wall Street Journal, Massachusetts regulators accused Merrill Lynch of co-opting "supposedly independent" research analysts to help them dump collapsing auction-rate securities on unsuspecting customers. Let's see. First they "co-opted" their own research department to get them to promote securities of issuers who they were looking to get investment banking business. Then the regulators push for independent research. Now Merrill is accused of "co-opting" the independent analysts to enable Merrill to dump its inventory of auction rate securities?The continuing problem with Merrill did not escape the notice of investigators -"We've seen a corruption of research," says Massachusetts Secretary of the Commonwealth William Galvin, who oversees the state securities division...continue to full post

Full post as published by SECLaw.com on August 02, 2008 (boomark / email).