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On December 11, 2023, Wolf Popper LLP filed a class action complaint in the U.S. District Court for the Southern District of New York against Merrill Lynch, Pierce, Fenner & Smith, Inc.  The complaint alleges that Merrill breached and continues to breach its contract with retirement account customers requiring Merrill to pay a “reasonable” rate of interest on cash swept to its affiliate (Bank of America, N.A.).  Rather than pay a reasonable rate of interest, Merrill defaults retirement customers into low yielding “sweep accounts.”  For example, as market interest rates rose beginning in March 2022 and into 2023, Merrill paid tier 1 and 2 retirement account customers (those customers with less than $1 million of assets under management) only 0.01% APY (annual percentage yield) interest on their swept cash, which is equivalent to $1 of interest on $10,000 in cash per year and over 500 times less than the contemporaneous federal funds rate.
 
The complaint, among other things, seeks damages on behalf of retirement customers resulting from Merrill’s failure to pay them a reasonable rate of interest and an injunction barring Merrill from continuing to pay an unreasonable rate of interest on retirement sweep accounts.
 
The filing of the class action complaint, linked herein, was reported on by multiple publications.  Some of articles about this news are also linked herein.
 
The case is Margaret McCrary v. Merrill Lynch, Pierce, Fenner & Smith Inc., Case No. 1:23-cv-10768-AT (S.D.N.Y.), pending before United States District Judge Analisa Torres.
 
Wolf Popper LLP is a nationally recognized law firm in the fields of securities litigation, consumer fraud, ERISA, antitrust, health care litigation, and corporate transactional/derivative litigation

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