{"id":5353,"date":"2012-08-23T00:00:00","date_gmt":"2012-08-23T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2012\/08\/2nd_circuit_affirms_dismissal"},"modified":"2022-04-04T13:07:41","modified_gmt":"2022-04-04T18:07:41","slug":"2nd-circuit-affirms-dismissal","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/2nd-circuit-affirms-dismissal\/","title":{"rendered":"2nd Circuit Affirms Dismissal of $18.5M Auction-Rate Securities Lawsuit Against Merrill Lynch Filed by Anschutz Corp."},"content":{"rendered":"

The U.S. Court of Appeals for the Second Circuit has affirmed a lower court\u2019s ruling to dismiss the ARS lawsuit filed against Merrill Lynch (MER)<\/a>, Merrill Lynch, Pierce, Fenner, and Smith Inc. ( MLPF&S)<\/a>, Moody\u2019s Investor Services (MCO), and the McGraw-Hill Companies, Inc. (MHP). Pursuant to state and federal law, plaintiff Anschutz Corp., which was left with $18.95 million of illiquid auction-rate securities when the market failed, had brought claims alleging market manipulation, negligent misrepresentation, and control person liability. The case is Anschutz Corp. v. Merrill Lynch & Co. Inc.<\/em><\/p>\n

According to the court, Merrill Lynch underwrote a number of the Anchorage Finance ARS and Dutch Harbor ARS offerings in which Anschutz Corp. invested. To keep auction failures from happening, Merrill was also involved as a seller and buyer in the ARS auctions and had its own account. Placing these support bids in both ARS auctions allowed Merrill to make sure that they would clear regardless of the orders placed by others. The financial firm is said to have been aware that the ARS demand was not enough to \u201cfeed the auctions\u201d unless it too made bids and that its clients did not know of the full extent of these practices.<\/p>\n

Per its securities complaint, Anschutz contends that the description of Merrill\u2019s ARS practices, which were published on the financial firm\u2019s website beginning in 2006, were misleading, untrue, and \u201cinadequate.\u201d The plaintiff accused the credit rating agency defendants of giving the ARS offerings ratings that also were misleading and false and should have been lowered (at the latest) in early 2007 when Merrill knew or should have known that the ratings they did receive were unwarranted.<\/p>\n

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

The U.S. Court of Appeals for the Second Circuit has affirmed a lower court\u2019s ruling to dismiss the ARS lawsuit filed against Merrill Lynch (MER), Merrill Lynch, Pierce, Fenner, and Smith Inc. ( MLPF&S), Moody\u2019s Investor Services (MCO), and the McGraw-Hill Companies, Inc. (MHP). Pursuant to state and federal law, plaintiff Anschutz Corp., which was […]<\/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":[3865,3845,3752,3800,3882],"tags":[],"class_list":["post-5353","post","type-post","status-publish","format-standard","hentry","category-auction-rate-securities","category-credit-rating-agencies","category-financial-firms","category-merrill-lynch","category-moodys"],"yoast_head":"\nDismissal of $18.5M Merrill Lynch Securities Fraud Lawsuit Affirmed<\/title>\n<meta name=\"description\" content=\"The U.S. Court of Appeals for the Second Circuit has affirmed a lower court\u2019s ruling to dismiss the ARS securities lawsuit filed against Merrill Lynch.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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