BofA’s Merrill Lynch Settling Cash Sweep Suit for $39 Million
Merrill Lynch has reportedly agreed to settle a lawsuit accusing it of underpaying brokerage customers. The Bank of America-owned brokerage will pay $39 million in the settlement, Reuters reported Wednesday (Sept. 30), citing court documents. The class action suit accused Merrill of paying brokerage customers near-zero interest rates rather than market rates on idle cash sitting in retirement…
Merrill Lynch, a bank owned by Bank of America, is reportedly settling a lawsuit for $39 million, according to Reuters. The case, which was set to go to trial, alleged that Merrill Lynch paid brokerage customers near-zero interest rates on idle cash in retirement accounts instead of market rates. The lawsuit, filed by customers who held Merrill Edge online accounts between December 15, 2016 and March 15, 2020, claimed that the company violated its client agreements by automatically moving cash to deposit accounts that paid less than a "reasonable rate" of interest.
Merrill Lynch denied any wrongdoing in the settlement. The report notes that many large banks and brokerages have faced similar lawsuits over low-yielding sweep accounts in recent years, particularly in 2023 and 2024 when customers complained that those accounts were not keeping up with rising interest rates.
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