Merrill Settlement with Ohio STRS Gets Final Approval

September 9, 2009 ( - Ohio Attorney General Richard Cordray announced that the $475-million settlement between the State Teachers Retirement System (STRS) and Merrill Lynch has been finalized.

The settlement, first approved in January (see Merrill Settles Subprime-Related Suits ), became final on August 4 and was not challenged within the required 30 days from the court’s approval, according to the announcement from Cordray’s office. Merrill agreed to pay $475 million in cash to investors including STRS Ohio, which was lead plaintiff in the case, and $75 million in cash to settle claims by company employees who held stock in certain retirement plans.

The suit, filed last May, accused Merrill Lynch of issuing false and misleading statements about collateralized debt obligations and other assets backed by subprime mortgages, which served to artificially inflate the value of the brokerage giant’s shares. Merrill did not admit to any wrongdoing in settling the case.

Merrill faces similar charges brought by the Public Employees Retirement System of Mississippi and other pension funds (see Judge Explains Lead Pension Plaintiff Selection ).

STRS Ohio is also part of a group of public pension funds serving as lead plaintiffs in a class action lawsuit against Bank of America (BofA) over allegations of misconduct during the bank’s Merrill Lynch acquisition (see Pension Plans Named as BofA Suit Lead Plaintiffs ).