July 1 , 2003
At the time of the $1.4 billion settlement involving 10 of the largest Wall Street firms, New York Attorney General Eliot Spitzer released emails from Merrill Lynch analysts that he said showed them giving favorable ratings to stocks in order to win and hold on to banking business. The Wall Street settlement would result in investors being able to seek damages for past wrongdoings through class action lawsuits according to Spitzer.
The largest settlement of its time, the investigation was considered one of the most embarrassing Wall Street developments that uncovered stock fraud and killed consumer confidence. Angry investors were quick to begin seeking retribution against some of Wall Street’s largest investment banks. However, on July 1, 2003, a Manhattan federal court dismissed class action claims brought against Merrill Lynch and former Internet analyst Henry Blodget.
Clearly delivering a message, Judge Milton Pollack used language described as “harsh”, “caustic”, “sarcastic”, and “strong”, to name a few, when dismissing the Merrill Lynch class action claims that involved thousands of investors. While some people believe Pollack’s decision to dismiss cases brought against Merrill Lynch is setting a precedent for future dismissals, other believe all Pollack has done is to clear the way of any frivolous or unsubstantiated claims.
The Merrill Lynch class action involved class members that were not Merrill Lynch customers, which is a much harder fraud case. There are still a high number of investors with valid stock fraud claims that qualified and experienced stock fraud lawyers may be able to help bring to court by obtaining direct evidence to create a more sturdy case. Individual stock fraud lawsuits and arbitrations are currently underway nationwide against major Wall Street firms that may have a more positive outcome for the investors in a case-by-case scenario.
Investors are still very angry over the Wall Street scandal that uncovered biased research and it is expected to show through a continued attempt to make individual claims against the firms. While Wall Street firms appear to be in the advantage after the Merrill Lynch class action dismissal, some believe Pollack’s decision will have little effect on individual pursuits and that the Pollack has always been unconvinced of securities fraud class action lawsuits.
For more information on stock fraud contact us to confer with a stock fraud lawyer.