Merrill Lynch and Citigroup Inc. dominated bidding on the risky residential mortgage-backed securities sold so far from the Federal Reserve Bank of New York‘s Maiden Lane II portfolio, the New York Fed reported on its website Friday. Merrill Lynch, Pierce Fenner & Smith paid $1.144 billion out of the total $4.684 billion in market value sold from the portfolio, which was formed to take toxic securities from insurer American International Group Inc. in the depths of the financial crisis. In March, AIG offered to buy the portfolio, but the New York Fed said a competitive auction process would better serve taxpayers that paid for the bailout.