HOUSTON (CN) - Merrill Lynch agreed to pay a $125 million fine and buy back millions of dollars in auction-rate securities whose value it propped up until the market collapsed, but unfairly excluded $140 million in ARS paper that it sold through the Amegy Bank, a class action claims in Federal Court.
The class, about 70 purchasers of auction rate securities, says Merrill Lynch unfairly and arbitrarily excluded them as "eligible clients," leaving them holding worthless paper for which they had paid $140 million. Amegy Bank is a national banking association headquartered in Houston.
"[The eight named] Plaintiffs are clients of Amegy holding ARPS (Auctions Rate Preferred Stock) purchased indirectly from Merrill Lynch, at a combined par value of $38.7 million. Approximately 70 clients of Amegy, in all, hold ARPS purchased indirectly from Merrill Lynch, at a combined par value of $140 million," the complaint states.
Plaintiffs are represented by Stephen Andrews with Oaks Hartline & Daly.
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