Merrill Lynch Lawsuits. Evidence of the double dealings and unscrupulous behavior of Merrill Lynch's stock analysts continues to rise to the surface. Recently a state investigation of their company revealed that "crap",'"junk," "disaster" and "dog" were words which their stock analysts used regularly to privately disparage stocks they were recommending to their clients. The language appeared in subpoenaed emails which were presented as evidence along with 100,000 pages of documents showing that Merrill Lynch Analysts were encouraged to give favorable stock recommendations in order to help their company obtain investment banking deals.
The company refused to admit misconduct, paid a nominal fine of $100 million (their approximate earnings for a single day) and in spite of the investigations continue to see business soar. The company reported second-quarter net earnings for 2002 17% higher than the 2001 second quarter and in the first half of 2002, their Private Client business sector earned 32% more before taxes than in the same period in 2001. During the same time pre-tax profit margin for this period was 13.3%, substantially better than the 8.9% reported for the first half of last year. Also, the company's retail stock brokerage sector, pre-tax earnings were 25% higher than in the first half of 2001 and the company's retail stock brokerage sector, pre-tax earnings were 25% higher than in the first half of 2001.
Meanwhile, the portfolios of their clients continue to reflect the declining market.
People who lost money on bad investments with Merrill Lynch may still have reason to be optimistic. Perhaps, the most significant aspect of the state settlement was a ruling that allows for further investigation of Merrill Lynch. Since this ruling, the SEC (Securities and Exchange Commission) has launched its own probe into analyst behavior on Wall Street, numerous private lawsuits have been filed and the Justice Department has also expressed an interest in joining investigations. Many of the private suits target former internet analyst Henry Blodget, who in July of 2001 was shown to have recommended Infospace stock to an investor despite evidence that he believed the stock to be a loser. The investor was awarded 400,000 dollars in the case and many in the legal community view it as setting a strong precedent for future settlements.
In a statement issued to the press, New York State General Attorney Eliot Spitzer.
said that money lost due to bad investments has a much greater chance of being recovered through private litigation. Clients who have purchased shares in any of the following stocks through Merrill Lynch may have a potential claim.
Aether Systems, Amazon.com, America Online, Ariba, Barnes and Noble, CMGI, Doubleclick, EBAY, Etoys, Excite@Home, Exodus, Global Crossings, Goto.com, Homestore, I-Village, Infospace, Inktomi ,Interliant, Internet Capital Group, Lifeminders, Lycos, My Points, Openwave Systems, Pets.com, Priceline,Quokka, Real Networks, Vertical Net, Yahoo, 24/7 Media.
If you have experienced losses with Merill Lynch contact us to review your legal options.
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