According to a press release dated July 20, 2007, a hearing will be held on November 5, 2007, at 10:00 a.m. before the Honorable John F. Keenan, United States District Judge of the Southern District of New York, 500 Pearl Street, New York, NY 10007 (the "Settlement Fairness Hearing") for the purpose of determining: (1) whether the proposed Settlement consisting of the sum of $15,000,000 in cash, plus a cash amount equivalent to interest which has been accruing since January 1, 2007, and separately paid costs of notice and settlement administration, should be approved by the Court as fair, reasonable, and adequate; (2) whether the proposed plan to distribute the settlement proceeds (the "Plan of Allocation") is fair, reasonable and adequate; (3) whether the application for an award of attorneys' fees and reimbursement of expenses to counsel for the Lead Plaintiff and the Class out of the Settlement proceeds should be approved; and (4) whether the Action should be dismissed with prejudice.
On December 24, 2002, the Court entered the Case Management Order #1 signed by U.S. District Judge Milton Pollack. The Court consolidated all the cases, and administratively closed all actions other than the Master File 02-CV-5097. On March 13, 2003, a Consolidated Amended Class Action Complaint was filed.
The original complaint alleges that the Defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5, by employing improper business practices which artificially inflated the prices of Merrill Lynch common stock and other securities during the Class Period. More specifically, the complaint alleges that Defendants' improper business practices included issuing a series of false, inflated and/or biased securities analyst research reports concerning the common stocks of several internet companies for whom Merrill Lynch provided or sought to provide investment banking services, in complete derogation of the "Chinese Wall" that was supposed to separate the firm's research analysts from its investment bankers; failing to adhere to the published securities ratings criteria Merrill Lynch distributed to its clients and other investors; and publicly recommending certain internet stocks to investors in their research reports despite private misgivings and negative opinions about those stocks as reflected in internal e-mails and communications. The complaint further alleges that Defendants manipulated their securities research as part of a larger scheme whereby Merrill Lynch wrongfully linked the compensation of Defendant Blodget and other Merrill Lynch securities analysts, to the amount of investment banking business the analysts generated. The complaint also alleges that Merrill Lynch issued several misstatements to investors concerning, inter alia, the integrity of the firm's securities research and analyst practices in reports the firm filed with the SEC and in other public statements.