Merrill Lynch & Co., Inc. ("Merrill Lynch" or the Company) is an American multinational investment management and financial services company.
The Complaint alleges that to maintain and enhance Merrill Lynch's investment banking relationships with Excite At Home Corporation ("Excite"), Defendants issued analyst reports with positive ratings on Excite which were materially misleading as they were inconsistent with their own contemporaneous, private adverse assessments of Excite.
The Complaint alleges that Defendants violated the federal securities laws by issuing analyst reports regarding Excite that recommended the purchase of Excite and which set price targets for Excite common stock which were materially false and misleading and lacked any reasonable factual basis. Primarily, the Complaint alleges that Defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder. Furthermore, when issuing their Excite reports, Defendants failed to disclose significant, material conflicts of interest in their use of Blodget's reputation and his Excite analyst reports to obtain investment banking business for Merrill Lynch. Furthermore, in issuing their Excite reports, in which they were recommending the purchase of Excite stock, Defendants failed to disclose material, non-public, adverse information which they possessed about Excite as well as their true opinion about the valuation of Excite.
The Complaint further alleges that 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, in which they recommended the purchase of Excite stock. The Complaint also alleges that Defendants failed to disclose material, non-public, adverse information which they possessed about Excite. Throughout the Class Period, the Defendants maintained an "ACCUMULATE/BUY" or "ACCUMULATE/ACCUMULATE" recommendation on Excite in order to obtain and support lucrative financial deals for Merrill Lynch. As a result of Defendants' false and misleading analyst reports, Excite'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.
According the Case Management Order #1 entered on December 20, 2002, the Court consolidated several actions on behalf of purchasers of the common stock of At Home Corporation, doing business as Excite@home. The consolidated actions were carried in the Clerk's office and known as the In re Merrill Lynch & Co., Inc. Excite@home Research Reports Securities Litigation, 02-CV-3042 (MP). On March 13, 2003, a Consolidated Amended Class Action Complaint was filed. On December 8, 2003, the Defendants filed a motion to dismiss the Complaints with prejudice. On June 2, 2006, the Court entered the Minute Order signed by Judge Michael B. Mukasey administratively closing the case pursuant to Memorandum from the Administrative Office of the United States Courts dated June 15th, 1973.
According to the Notice of Settlement for In re Merrill Lynch Research Reports Securities Litigation, 02 MDL 1484, dated March 19, 2007, this case, In re Merrill Lynch & Co., Inc. Excite@home Research Reports Securities Litigation, 02-CV-3042, is part of a proposed settlement of $125 million in cash. A settlement hearing will be held 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.
