Merrill Coughs Up $13.9M Over CDO Investments

Law360, New York (February 1, 2008, 12:00 AM EST) -- Merrill Lynch & Co. will give Springfield, Mass. $13.9 million to cover the costs of disputed collateralized debt obligation investments the bank made on the city's behalf, which lost almost all their value over several months in 2007 due to the subprime mortgage meltdown.

However, the bank is also facing an administrative complaint from the Massachusetts Securities Division, that accuses it of violating securities law in purchasing the CDOs for Springfield and seeking a permanent cease-and-desist order, an administrative fine and a censure.

Springfield's mayor and...
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