Merrill Lynch Retirement Cash Sweep Accounts Settlement
Case Overview
The lawsuit involves Bank of America’s Merrill Lynch unit, which has agreed to pay $39 million to settle claims brought by retirement account holders. The core allegation is that the firm moved customers' uninvested retirement funds into low-interest cash sweep accounts instead of paying the rates customers were entitled to under their agreements with the company.
The proposed class action settlement addresses claims from account holders who kept cash balances in Merrill Edge retirement accounts that were swept into Merrill Lynch’s Retirement Asset Savings Program between December 15, 2016, and March 15, 2020. The complaint alleges that Merrill Lynch failed to secure the necessary prior written affirmative consent from customers before sweeping these funds, and further claims that the company obscured details about these sweep accounts within its agreements.
The settlement was reached on September 1, avoiding a trial. While claim-filing instructions are not yet available, the settlement resolves claims for customers whose retirement account cash was swept through the program during the specified period. Merrill Lynch has not admitted any wrongdoing as part of this agreement.
Who May Qualify
Account holders who maintained Merrill Edge retirement accounts with cash balances swept into Merrill Lynch’s Retirement Asset Savings Program between December 15, 2016, and March 15, 2020.
Frequently Asked Questions
What is the basis of the lawsuit against Merrill Lynch?
The lawsuit alleges that Merrill Lynch swept idle cash from customers' retirement accounts into low-interest cash sweep accounts. The complaint further claims the company failed to obtain the required prior written affirmative consent before sweeping the funds and buried disclosures about the accounts within its agreements.
What is the current status of the settlement?
Merrill Lynch has agreed to pay $39 million to settle the class action lawsuit. However, the article notes that claim-filing instructions are not yet available, and affected people are advised to sign up for updates.
What was the legal basis for the claims?
The complaint alleges that federal Securities and Exchange Commission regulations require brokerage firms to obtain a customer’s prior written affirmative consent before sweeping cash into affiliated accounts or entities.
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