{"id":5184,"date":"2011-07-29T00:00:00","date_gmt":"2011-07-29T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/07\/sec_and_sifma_divided_over_whe"},"modified":"2022-04-04T15:51:20","modified_gmt":"2022-04-04T20:51:20","slug":"sec-and-sifma-divided-over-whe","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/sec-and-sifma-divided-over-whe\/","title":{"rendered":"SEC and SIFMA Divided Over Whether Merrill Lynch Can Be Held Liable for Alleged ARS Market Manipulation"},"content":{"rendered":"

In Wilson v. Merrill Lynch & Co. Inc.<\/em>, the Securities Industry and Financial Markets Association and the Securities and Exchange Commission have submitted separate amicus curiae briefs to the U.S. Court of Appeals for the Second Circuit that differ on whether Merrill Lynch<\/a> can be held liable for allegedly manipulating the auction-rate securities market. While SIFMA argued that an SEC order from 2006 that settled ARS charges against 15 broker-dealers affirmed the legality of the auction practices when they are properly disclosed, the SEC said that Merrill did not provide sufficient disclosures about its conduct in the ARS market and therefore what they did reveal was not enough to \u201cpreclude the plaintiff from pleading market manipulation.\u201d<\/p>\n

It was last year that the U.S. District Court for the Southern District of New York dismissed an investor claim that Merrill Lynch, which was acting as underwriter, manipulated the ARS market to attract investment. The court said that the claimant \u201cfailed to plead manipulative activity\u201d and agreed with the brokerage firm that adequate disclosures were made. After appealing to the Second Circuit, the investor requested that the SEC provide its thoughts on five court-posed questions about the adequacy of the financial firm\u2019s disclosures and how they impacted allegations of reliance and market manipulation.<\/p>\n

The SEC said that the plaintiff\u2019s claim that Merrill manipulated ARS auctions don\u2019t preclude him from pleading, for fraud-on-the-market reliance purposes, an efficient market. SIMFA, however, said the plaintiff was precluded from claiming \u201cmanipulative acts\u201d because investors have been made aware through \u201cubiquitous industry-wide disclosures about auction practices\u201d that broker-dealers\u2019 involvement in ARS actions is impacted by the \u201cnatural interplay\u201d of demand and supply.<\/p>\n


\nRelated Web Resources:<\/strong>
\nAuction-Rate Securities UPDATE: SEC Brief May Help ARS Investors<\/a>, Business Insider, July 26, 2011<\/p>\n


\nMore Blog Posts:<\/strong><\/p>\n

District Court in Texas Decides that Credit Suisse Securities Doesn\u2019t Have to pay Additional $186,000 Arbitration Award to Luby\u2019s Restaurant Over ARS<\/a>, Stockbroker Fraud Blog, June 2, 2011<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In Wilson v. Merrill Lynch & Co. Inc., the Securities Industry and Financial Markets Association and the Securities and Exchange Commission have submitted separate amicus curiae briefs to the U.S. Court of Appeals for the Second Circuit that differ on whether Merrill Lynch can be held liable for allegedly manipulating the auction-rate securities market. While […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3865,3752,3800,3741],"tags":[],"class_list":["post-5184","post","type-post","status-publish","format-standard","hentry","category-auction-rate-securities","category-financial-firms","category-merrill-lynch","category-securities-fraud"],"yoast_head":"\nSEC and SIFMA Divided Over Whether Merrill Lynch Can Be Held Liable for Alleged ARS Market Manipulation — Investor Lawyers Blog — July 29, 2011<\/title>\n<meta name=\"description\" content=\"In Wilson v. Merrill Lynch & Co. 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