Participants in the 401(k) plan at Merrill Lynch & Co. Inc., New York, reached a $75 million preliminary settlement with the brokerage firm to cover losses sustained in their retirement plans over the last several years.
The law firms of Cohen Milstein Sellers & Toll and Keller Rohrback announced the proposed settlement this morning.
A hearing will be held in U.S. District Court in New York at the end of July to determine if the payment will be approved, said Marc Machiz, an attorney with Cohen Milstein, who is representing Merrill workers in the class action.
He said that the class notice will be going out later this week to Merrill Lynch workers who participated in the companys 401(k), retirement accumulation or stock ownership plans between Sept. 30, 2006, and Dec. 31, 2008.
During this period, the value of Merrills stock declined by more than 80%.
The class action was initiated by participants in November 2007 to recoup some of the losses they incurred for investing a portion of their retirement savings in Merrill stock.
The suit alleged that the company should have known that its stock was an imprudent investment option for its plan participants.
A Merrill spokesman could not be immediately reached for comment.
Mark Bruno is a reporter at InvestmentNews, a sister publication of Pensions & Investments