By Margarita Snegireva. Merrill Lynch & Co. will pay the city of Springfield $13.9 million to settle a dispute over investments that soured and became the focus of investigations by state regulators, the two sides said Thursday.
The brokerage firm said in a statement released late Thursday that it settled after a review showed Springfield officials never gave explicit permission to invest in the securities, many of which were related to the troubled subprime mortgage market.
"Merrill Lynch is crediting the city of Springfield with approximately $13.9 million in cash, the full original purchase price of CDO investments that have been under dispute," Mayor Domenic J. Sarno, Springfield Finance Control Board Chairman Chris Gabrieli and Coakley said in a joint statement.
Merrill Lynch & Co., Inc. , through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services worldwide. The firm's world headquarters is located in New York City. The company occupies the entire 34 stories of the Four World Financial Center building in Manhattan.
On November 1, 2007, Merrill Lynch CEO Stanley O'Neal left the company, after being criticized for the way he handled the subprime mortgage crisis, which resulted in about US $ 2.24 billion in unexpected losses, and for discussing in public the possible merger with Wachovia banking corporation, without being authorized by the board to do so. He left Merrill Lynch with about US $ 161 million worth of stock options and retirement benefits. John Thain, CEO of the New York Stock Exchange, succeeded him as CEO on December 1, 2007.
On January 17, 2008, Merrill Lynch reported a $9.83 billion fourth quarter loss incorporating a $16.7 billion write down of assets associated with subprime mortgages.