Cases & Investigations
McCrary v. Merrill Lynch, Pierce, Fenner & Smith, Inc. - Sweep Accounts Consumer Litigation

Wolf Popper LLP is prosecuting a class action in the U.S. District Court for the Southern District of New York against Merrill Lynch, Pierce, Fenner & Smith, Inc.  The complaint alleges that Merrill breached and continues to breach its contract with retirement account customers requiring Merrill to pay a “reasonable” rate of interest on cash swept to its affiliate  (Bank of America, N.A.).  Rather than pay a reasonable rate of interest, Merrill defaults retirement customers into low yielding “sweep accounts.”  For example, as market interest rates rose beginning in March 2022 and into 2023, Merrill paid tier 1 and 2 retirement account customers (those customers with less than $1 million of assets under management) only 0.01% APY (annual percentage yield) interest on their swept cash, which is equivalent to $1 of interest on $10,000 in cash per year and over 500 times less than the contemporaneous federal funds rate.
 
The lawsuit, among other things, seeks damages on behalf of retirement customers resulting from Merrill’s failure to pay them a reasonable rate of interest and an injunction barring Merrill from continuing to pay an unreasonable rate of interest on retirement sweep accounts.
 
The case is Margaret McCrary v. Merrill Lynch, Pierce, Fenner & Smith Inc., Case No. 1:23-cv-10768-AT (S.D.N.Y.), pending before United States District Judge Analisa Torres.
 
 

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