Merrill Lynch (MER) today reached a settlement with the Massachusetts Secretary of the Commonwealth to provide clients with access to billions of dollars in funds in connection with the sale of auction rate securities. The WSJ reports that the announcement comes nearly a week after Merrill had indicated it would begin buying back about $10 billion in auction-rate holdings from individual, or retail, investors for one year starting Jan. 15.
According to the WSJ, the settlement with Massachusetts does not resolve Merrill’s issues with the State of New York–New York Attorney General Andrew Cuomo reportedly confirmed on Friday that he’ll file a lawsuit against Merrill Lynch in state court if they can’t reach a settlement with the firm by the end of the day on Thursday.
Under the deal with Massachusetts, Merrill will reportedly buy back all illiquid auction-rate securities at par starting Oct. 15 from its retail customers who have less than $3 million on deposit.
