BofA's Merrill Lynch settles cash sweep case for $39 million, must face second lawsuit
BAC•Merrill Lynch will pay $39 million to settle a class action over interest on idle retirement-account cash, subject to court approval, and must face most of a separate similar lawsuit.
1. Settlement filed
The proposed settlement, filed in Manhattan federal court, covers holders of Merrill Edge online accounts from December 15, 2016, to March 15, 2020. The lawsuit claimed the accounts paid 0.05% to 0.14% interest while other brokerages paid customers about 2%. Merrill Lynch denied wrongdoing; the settlement requires approval by a judge.
2. Separate lawsuit proceeds
A separate Manhattan federal court ruling allows customers to pursue most of a proposed class action covering retirement and non-retirement accounts. The judge said customers could try to prove Merrill Lynch breached its contracts by failing to provide a “reasonable rate” of return reflecting economic and business conditions. Merrill Lynch also agreed in January 2025 to pay $25 million to settle related claims by the SEC, without admitting wrongdoing.
