Merrill Lynch to settle case for €108.2m
Merrill Lynch will pay a 100 million dollar (€108.2m) fine to settle charges that its analysts misled investors.
Analysts were accused of touting shares in companies so the firm would win highly profitable investment banking contracts from the same companies.
The agreement reached yesterday with New York Attorney General Eliot Spitzer also requires Merrill Lynch to stop rewarding its 800 analysts for helping the firm win the investment banking fees.
Now Merrill Lynch’s analysts will only be paid for the quality of their stock research.
In a 10-month investigation, Spitzer’s department uncovered e-mails from analysts that strongly disparaged shares of Internet companies that they had rated as good buys for investors
Merrill Lynch chairman and chief executive David Komanksy said the e-mails were embarrassing for the company.
He said Merrill Lynch’s image had been hurt, but added that he did not believe the firm lost much business as a result.
’’I think we will be able to regain the confidence of the investing public,’’ he said. The firm also issued an apology.
Spitzer was positive about the steps Merrill had agreed to take.
’’By adopting the reforms embodied in the settlement, Merrill Lynch is setting a new standard for the rest of the industry to follow,’’ he said.
