(Host) The State of Vermont has received a
$500,000 payment from Merrill Lynch as part of a multi-state settlement that was negotiated with the brokerage firm. The penalty, which is one of the largest in history of Vermont’s Securities Division, will be deposited into the state’s General Fund.
The money comes at a time when the transition team of Governor-elect Jim Douglas is looking for ways to trim spending in the current fiscal year. Phil Keller, the deputy commissioner of the Securities Division, says the state of Vermont charged that Merrill Lynch had violated state securities laws by providing consumers with misleading and fraudulent information.
Keller says this happened when Merrill Lynch issued overly optimistic research reports for companies whose stock offerings Merrill Lynch was being paid to distribute. Keller says the settlement is part of an effort to help restore consumer confidence in the securities market:
(Keller) “What this agreement will do is hopefully establish a fire wall between the investment banking side of firms like Merrill Lynch and the research side of the brokerage firms. And hopefully will restore the confidence of small investors and the integrity of the information that they receive from companies like Merrill.”
(Host) Keller says the state is negotiating similar settlement cases with twelve other national brokerage firms.