South Miami (Fla.) City Pension Plan will get $115,000 from Merrill Lynch in a settlement after the plan claimed the firm breached its fiduciary duties while it was investment consultant to the $19 million plan, according to Kenneth R. Harrison Sr., attorney for pension board.
The case was the first to be settled of a number of disputes by Florida public pension plans against Merrill Lynch, Mr. Harrison said.
Bill Halldin, spokesman for Bank of America, parent of Merrill Lynch, declined to comment on the South Miami plan case but confirmed a number of other plans have cases pending against the firm. He declined to comment on them. Terry R. Weiss, an attorney with Greenberg Traurig, which represented Merrill Lynch, declined to comment.
In the South Miami settlement, Merrill Lynch said it “denies all allegations … (and) any wrongdoing or liability.”
The settlement agreement has no information about the South Miami plan's allegations or claims or reasons it brought the case.
Javier Banos, chairman of the plan's board, declined to discuss the terms of the settlement but said the board plans to meet July 30 to discuss settlement-related issues. He believes the plan agreed to pay its outside attorneys in the case one-third of the settlement plus some costs associated with the case, he said.
Mr. Harrison estimated the fund lost between $250,000 and $1.5 million from the alleged fiduciary breach and breach of disclosure.
The South Miami plan terminated Merrill Lynch as a consultant sometime before the plan initiated arbitration proceedings against the firm with Financial Industry Regulatory Authority in 2007, Mr. Harrison said. Bogdahn Consulting is the plan's current consultant, he added.