Merrill Lynch & Co., Inc. ("Merrill Lynch" or the Company) is an American multinational investment management and financial services company.
The Complaint alleges that Defendants violated the federal securities laws by issuing analyst reports regarding Pets.com that recommended the purchase of Pets.com common stock and which set price targets for Pets.com common stock, which were materially false and misleading and lacked any reasonable factual basis. The Complaint further alleges that, when issuing their Pets.com analyst reports, the Defendants failed to disclose significant, material conflicts of interest, which resulted from their use of Blodget's reputation and his ability to issue favorable analyst reports, to obtain investment banking business for Merrill Lynch. Furthermore, in issuing their Pets.com analyst reports, in which they recommended the purchase of Pets.com stock, the Defendants failed to disclose material, non-public, adverse information which they possessed about Pets.com. Throughout the Class Period, the Defendants maintained "ACCUMULATE/ACCUMULATE" or "BUY/BUY" recommendations on Pets.com in order to obtain and support lucrative financial deal for Merrill Lynch. As a result of Defendants' false and misleading analyst reports, Pets.com's common stock traded at artificially inflated levels during the class period.
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.
On December 24, 2002, the Court entered the Case Management Order #1. According to the Order, the actions filed on behalf of the common stock of Pets.com, Inc. were consolidated and now carried out under In re Merrill Lynch & Co., Inc. Pets.com, Inc. Research Reports Securities Litigation, 02-CV-3634(MP). On March 14, 2003, an Amended Complaint was filed. On November 10, 2003, the Court entered the Decision and Order No. 21 dismissing the Complaints with prejudice for the reason that the Complaints fail to state a claim principally because there are no claims in the Complaints that the alleged misrepresentations or omissions proximately caused the losses claimed. The Plaintiff filed a Notice of Appeal and an Amended Notice of Appeal. On August 23, 2006, the Court entered the Mandate of the U.S. Court of Appeals for the Second Circuit withdrawing the appeal from active consideration, without prejudice with leave to reactivate.
According to the Notice of Pendency and Proposed Settlement of Class Actions, dated March 19, 2007, for In re Merrill Lynch Research Reports Securities Litigation, 02 MDL 1484, this case, In re Merrill Lynch & Co., Inc. Pets.com, Inc. Research Reports Securities Litigation, 02-CV-3634, is part of a proposed settlement of $125 million in cash. A settlement hearing was scheduled before the Honorable John F. Keenan, United States District Judge of the Southern District of New York to determine whether the settlement should be approved.
On September 5, 2007, the Court issued the Opinion and Order No. 95140. According to the Order, U.S. District Judge John F. Keenan certified the class action and approved the settlement, approved the Plan of Allocation and finalized the award of attorneys’ fees and expenses. On September 19, 2007, the Court entered the Order and Final Judgment for In re Merrill Lynch Research Reports Securities Litigation, 02 MDL 1484.
