Merrill Lynch, Pierce, Fenner & Smith, Inc.

Merrill Lynch was founded in 1914 and was once one of the world’s leading wealth management, capital markets and advisory companies, with offices in 40 countries and territories and total client assets of approximately $1.6 trillion. In September 2008, after suffering billions of dollars in losses as a result of the subprime mortgage meltdown and after witnessing Bear Stearns and Lehman Brothers suffer disastrously from the same subprime mortgage implosion, Merrill Lynch decided to take matters into its own hands, and agreed to be acquired by Bank of America in an all-stock transaction worth approximately $44 billion. That deal is expected to close in early 2009. Since February 2006, Merrill has held a significant stake in BlackRock, a top global investment management firm with $1.3 trillion in assets under management.

Additional Information

Merrill Lynch Fined $14 Million for Improper Mutual Fund Sales 
The NASD fined Merrill Lynch $14 million suitability and supervisory violations relating to the sale of Class B mutual fund shares. The fines arose from Merrill Lynch’s sales of Class B shares of mutual funds that involved higher fees and were less advantageous to investors than in Class A shares of the same mutual fund had been sold.

Merrill Lynch Ordered to Pay Customers $30.6 Million 
A FINRA arbitration panel ordered Merrill Lynch to pay an investor $30.6 million to compensate the investor for damages suffered as a result of Merrill Lynch’s misconduct. The investor asserted causes of action for negligence, breach of contract, misrepresentation, and breach of fiduciary duty related to recommendations and sales of the Sphinx Managed Futures Index Fund LP.

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