The law firm of Girard Gibbs LLP (http://www.girardgibbs.com)
announces that it is has filed a class action lawsuit on behalf of
persons who purchased Auction Rate Securities from Merrill Lynch & Co.,
Inc. (NYSE: MER) and Merrill Lynch, Pierce, Fenner & Smith Inc. between
March 25, 2003 and February 13, 2008, inclusive (the "Class
Period”), and who continued to hold such
securities as of February 13, 2008.
The class action, captioned Burton v. Merrill Lynch Corp., et al.,
08-cv-03037 (LAP), is pending in the United States District Court for
the Southern District of New York. The class action is brought against
Merrill Lynch & Co., Inc. and its wholly-owned broker-dealer subsidiary,
Merrill Lynch, Pierce, Fenner & Smith Inc.
The Complaint alleges that Merrill Lynch violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934 by deceiving investors
about the investment characteristics of auction rate securities and the
auction market in which these securities traded. Auction rate securities
are either municipal or corporate debt securities or preferred stocks
which pay interest at rates set at periodic "auctions.”
Auction rate securities generally have long-term maturities or no
maturity dates.
The Complaint alleges that, pursuant to uniform sales materials and
top-down management directives, Merrill Lynch offered and sold auction
rate securities to the public as highly liquid cash-management vehicles
and as suitable alternatives to money market mutual funds. According to
the Complaint, holders of auction rate securities sold by Merrill Lynch
and other broker-dealers have been unable to liquidate their positions
in these securities following the decision on February 13, 2008 of all
major broker-dealers including Merrill Lynch to "withdraw
their support” for the periodic auctions at
which the interest rates paid on auction rates securities are set.
The Complaint alleges that Merrill Lynch failed to disclose the
following material facts about the auction rate securities it sold to
the class: (1) the auction rate securities were not cash alternatives,
like money market funds, but were instead, complex, long-term financial
instruments with 30 year maturity dates, or longer; (2) the auction rate
securities were only liquid at the time of sale because Merrill Lynch
and other broker-dealers were artificially supporting and manipulating
the auction rate market to maintain the appearance of liquidity and
stability; (3) Merrill Lynch and other broker-dealers routinely
intervened in auctions for their own benefit, to set rates and prevent
all-hold auctions and failed auctions; and (4) Merrill Lynch continued
to market auction rate securities as liquid investments after it had
determined that it and other broker dealers were likely to withdraw
their support for the periodic auctions and that a "freeze”
of the market for auction rate securities would result.
If you purchased or otherwise acquired Auction Rate Securities from
Merrill Lynch between March 25, 2003 and February 13, 2008, and
continued to hold such securities as of February 13, 2008, you may, no
later than May 25, 2008, request that the Court appoint you as lead
plaintiff. A lead plaintiff is a representative party acting on behalf
of other class members in directing the litigation. To be appointed lead
plaintiff, the Court must decide that your claim is typical of the
claims of other class members, and that you will adequately represent
the class. Your ability to share in any recovery is not affected by the
decision whether or not to serve as a lead plaintiff. You may retain
Girard Gibbs LLP, or other attorneys, to serve as your counsel in this
action.
If you wish to discuss your rights as an investor in auction rate
securities through Merrill Lynch or any other brokerage, please contact
Girard Gibbs LLP toll-free at (866) 981-4800. A copy of the complaint is
available from the Court, or can be viewed on Girard Gibbs LLP’s
website at: http://www.girardgibbs.com/auctionrate.html.
Girard Gibbs LLP is one of the nation’s
leading firms representing individual and institutional investors in
securities fraud class actions and litigation to correct abusive
corporate governance practices, breaches of fiduciary duty and proxy
violations. For more information, please access the firm’s
web site, www.girardgibbs.com/auctionrate.html.
To discuss this class action with us, please contact the following
attorneys:
Daniel C. Girard (dcg@girardgibbs.com)
Jonathan K. Levine (jkl@girardgibbs.com)
Aaron M. Sheanin (ams@girardgibbs.com)
601 California Street, 14th Floor
San Francisco, CA 94108
Phone number: (866) 981-4800
Website: http://www.girardgibbs.com/auctionrate.html
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