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Merrill Lynch Cash Sweep Programs Consumer Litigation

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Type: Current Cases

Case Number: 1:23-cv-10768-MMG-BCM

Class Period: March 2022 - Present

Defendant(s): Merrill Lynch, Pierce, Fenner & Smith, Inc.

Court: United States District Court for the Southern District of New York

Wolf Popper LLP is co-lead counsel in a putative class action in the U.S. District Court for the Southern District of New York against Merrill Lynch, Pierce, Fenner & Smith, Inc.  The lawsuit challenges the interest rates paid on cash held in Merrill customers’ accounts automatically swept into deposit accounts at Merrill-affiliated banks (Bank of America, N.A. and Bank of America California, N.A). The lawsuit, among other things, alleges that Merrill breached and continues to breach its contractual obligations by failing to pay “reasonable” rates of interest and by failing to ensure that such rates are set based on economic and business conditions.  For example, as market interest rates rose beginning in March 2022 and into 2023, Merrill paid tier 1 and 2 account investors (those investors with less than $1 million of assets under management) only 0.01% 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 Merrill customers and an injunction barring Merrill from continuing the alleged misconduct.
 
The case is In re Merrill Lynch Cash Sweep Programs Litigation, Case No. 1:23-cv-10768-MMG-BCM (S.D.N.Y.), pending before United States District Judge Margaret M. Garnett. 
 
 

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Related Attorneys

  1. Adam J. Blander
  2. Emer Burke
  3. Robert C. Finkel

Related Practice Areas

  1. Commercial Litigation & Arbitration
  2. Consumer Litigation & Consumer Fraud Class Actions

Documents & Links

  1. Merrill Lynch Complaint

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