Mass. settles with Merrill Lynch on securities matter

Massachusetts' top securities regulator said today that Merrill Lynch & Co Inc. reached a settlement on auction-rate securities with the state and will soon begin buying back some illiquid auction-rate securities.

The agreement, announced by Secretary of State William F. Galvin (right), is expected to resolve the state's enforcement actions against the Wall Street investment bank.

Massachusetts had charged that Merrill Lynch had misled clients on how liquid the auction-rate securities market was and had published overly optimistic research pieces about the market in order to help sell the securities more aggressively.

Merrill Lynch has told regulators that its customers have about $10 billion in auction-rate securities, the Massachusetts Securities Division told the Globe. (Reuters)