On January 20, 2005, after additional extensive briefing and oral arguments, the United States Court of Appeals for the Second Circuit affirmed the dismissal of the 24/7 Real Media and Interliant complaints with prejudice. On October 11, 2005, the United States Supreme Court declined to review the 24/7 Real Media case.
On December 9, 2002, the Court entered the Case Management Order #1 granting the motion to consolidate several cases under In re Merrill Lynch & Co., Inc. Media, Inc. Research Reports Securities Litigation, 02-CV-3210 (MP). On March 13, 2003, a First Consolidated Amended Class Action Complaint, and the defendants responded by filing a motion to dismiss Consolidated Amended Class Action Complaint on April 30, 2003. On July 1, 2003, the Court entered the Decision and Order signed by Judge Milton Pollack granting the motion to dismiss the consolidated class action complaints. On August 7, 2003, the Court entered the Judgment dismissing the consolidated amended complaints with prejudice and the case was closed. On August 12, 2003, the Court entered the Order denying the plaintiff’s move for reconsideration of this Court's 6/30/03 Decision and Order dismissing w/ prejudice the amended complaints in the 24/7 Real Media, Inc. (24/7) and Interliant, Inc. (Interliant) consolidated actions. On September 10, 2003, a Notice of Appeal was filed by the Lead Plaintiffs.
In October 2002, the Judicial Panel on Multidistrict Litigation granted the Merrill Lynch Defendants’ motion to transfer all such cases to the Southern District of New York for coordinated pre-trial proceedings. The cases were transferred to the Honorable Milton Pollack, Senior United States District Judge, and were coordinated under the caption In re Merrill Lynch Research Reports Securities Litigation, 02 MDL 1484.
The original Complaint alleges that to maintain and enhance Merrill Lynch's investment banking relationships with 24/7, defendants issued positive ratings on the Company which were materially misleading as they were inconsistent with their own contemporaneous, private adverse assessments of 24/7. For example, defendants were repeatedly issuing a short and long-term accumulate rating on 24/7 despite Blodget's internal description of 24/7 as a "piece of (----)." On April 8, 2002, New York State Attorney General Eliot Spitzer announced that a ten-month investigation had revealed that Merrill Lynch's "supposedly independent and objective investment advice was tainted and biased by the desire to aid Merrill Lynch's investment banking business." Merrill Lynch's ratings on 24/7 were among those challenged by the Attorney General.