On October 7, 2026, Judge Valerie E. Caproni of the United States District Court for the Southern District of New York granted preliminary approval of a $39 million class action settlement in
Valelly v. Merrill Lynch, Pierce, Fenner & Smith Inc., Case No. 1:19-cv-07998-VEC (S.D.N.Y.). The parties reached the proposed settlement shortly before trial, which had been scheduled to commence on October 13, 2026. The settlement resolves claims that Merrill Lynch breached its contractual obligation to pay a “reasonable” rate of interest on cash held in self-directed retirement brokerage accounts through its Retirement Asset Savings Program (“RASP”). The Court scheduled a final approval hearing for March 12, 2027, at 10:00 a.m., in Courtroom 20C of the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, New York.
The settlement follows more than seven years of litigation prosecuted by Wolf Popper LLP on behalf of Merrill Edge retirement account holders. Plaintiff alleges that Merrill defaulted customers into low-yielding sweep accounts at its affiliate, Bank of America, N.A., which paid interest rates substantially below prevailing market rates and those available on comparable products.
On February 26, 2026, the Court certified a class of persons who had Merrill Edge retirement accounts with cash balances swept through RASP between December 15, 2016 and March 15, 2020, and appointed Wolf Popper as Class Counsel and thereafter set a trial date. In granting class certification, Judge Caproni recognized Wolf Popper’s “substantial experience litigating complex class actions” and observed that the firm had “doggedly prosecuted this case for many years.”
In granting preliminary approval of the settlement, the Court preliminarily found that it resulted from good-faith, extensive, arm’s-length negotiations, fell within a range of reasonableness warranting final approval, and had no obvious deficiencies. The Court also approved the proposed notice program. Pursuant to the Court’s Order, Class Members who wish to object to the proposed settlement or counsel’s fee and expense requests must file and serve their objections by February 19, 2027.
Various media outlets have reported on the settlement. For example, one article quoted Adam Blander, one the Wolf Popper partners who litigated the case, stating that he was “gratified” with the result for the class and that “
Valelly was the first known case to address a broker’s contractual obligation to pay a reasonable rate of interest on retirement sweep accounts” and that the lawsuit has “inspired many similar cases.”
Additional information regarding the settlement, including the Plan of Allocation, notice documents, and applicable deadlines will be posted to
www.MLRetirementAccountLitigation.com.