Massachusetts Sues Merrill Lynch on CDO Sales
Massachusetts' top securities regulator said on Friday that the state had sued Merrill Lynch over CDOs sold to the city of Springfield, Mass. In a complaint filed by Secretary William Gavin's office, the state said it is seeking an order "to disgorge all profits attributable to the alleged wrongdoing," as well as calling for an independent consultant to review "systemic supervisory breakdowns and incentives within Merrill that allowed the alleged wrongdoing to occur." HW had noted earlier that Merrill Lynch had agreed to settle with the city over what it said was an "unauthorized" purchase, reimbursing $13.9 million in investment funds after Springfield found itself facing mounting losses over mortgage-related CDOs it didn't know it owned. Click here for a copy of the complaint.