Missouri to get $7.1 Million in Wall Street Settlement
Jefferson City, Mo. – Missouri officials have given preliminary approval to the state's share of a nearly $1.4 billion national settlement with Wall Street brokerage houses.
The settlement involves 10 investment firms whose analysts recommended stocks to investors while their investment banking divisions were underwriting them. Merrill Lynch is one of the 10 firms. Missouri Secretary of State Matt Blunt said the company's analysts were encouraged to give exaggerated stock values.
"At no time would they disclose that Merrill Lynch benefited because of that investment banking relationship from a good sale of shares in that particular company," Blunt said.
Missouri will receive $7.1 million in restitution. The firms are also required to pay for independent research and investor education programs.
The settlement requires the firms to sever the links between research and investment banking, and to contract with at least three independent research firms.