Merrill Lynch & Co., Inc. ("Merrill Lynch" or the Company) is an American multinational investment management and financial services company.
The Complaint alleges that Merrill Lynch and its well-known Internet stock analyst Henry Blodget violated the federal securities laws by knowingly issuing false and misleading analyst reports regarding Quokka during the Class Period. Based on e-mails and other internal Merrill Lynch communications, which were made public as a result of the investigation conducted by the New York State Attorney General, the Complaint alleges that Defendants failed to disclose a significant conflict of interest between their investment banking and research departments. Specifically, the Complaint alleges that Henry Blodget and other Merrill Lynch analysts issued very favorable analyst reports regarding Quokka to the public when they allegedly knew that the positive recommendations were unwarranted and false. The Complaint further alleges that, unbeknownst to the investing public, Merrill Lynch's buy recommendations and price targets for these companies were driven by its efforts to attract lucrative investment banking business rather than by the companies' fundamental merits.
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 case captioned Troutman v. Merrill Lynch & Co. & Henry Blodget, 02-CV-7585, brought on behalf of purchasers of the common stock Quokka Sports, Inc. shall be carried in the Clerk's office and known as the In re Merrill Lynch & Co., Inc. Quokka Sports Research Reports Securities Litigation, 02-CV-7585(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 22, 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. On January 3, 2007, the Court entered the Certified Copy of the Mandate of the U.S. Court of Appeals granting the motion to remand. According to the Mandate, the appellants seek remand of the appeals because they are part of a global settlement.
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, In re Merrill Lynch & Co. Quokka Sports, Inc. Research Reports Securities Litigation, 02-CV-7585, 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, 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.
