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FREQUENTLY ASKED QUESTIONS
- Why did I get this Notice package?
You may have purchased or acquired Merrill Lynch common stock or any of the Preferred
Securities listed below during the Settlement Class Period from October 17, 2006
through December 31, 2008.
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List of Eligible Merrill Lynch Securities
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NYSE Symbol
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CUSIP No.
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1.
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Merrill Lynch Common Stock
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MER
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590188108
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Nos. 2 – 14 below are collectively referred to as the "Preferred Securities" in the
Notice
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2.
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Merrill Lynch Capital Trust III - 7% Preferred - MER D
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MERPRD
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59021F206
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3.
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Merrill Lynch Capital Trust IV - 7.12% Preferred - MER E
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MERPRE
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59021G204
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4.
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Merrill Lynch Capital Trust V - 7.28% Preferred - MER F
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MERPRF
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59021K205
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5.
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Merrill Lynch Series 1 Floating Preferred - MER G
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MERPRG
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59021S703
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6.
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Merrill Lynch Series 2 Floating Preferred - MER H
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MERPRH
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59021S638
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7.
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Merrill Lynch Series 3 - 6.375% Preferred - MER I
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MERPRI
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59021V839
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8.
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Merrill Lynch Series 4 Floating Preferred - MER J
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MERPRJ
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59021V813
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9.
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Merrill Lynch Series 5 Floating Preferred - MER L
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MERPRL
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59022C178
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10.
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Merrill Lynch Series 6 - 6.70% Preferred - MER N
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MERPRN
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59022Y840
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11.
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Merrill Lynch Series 7 - 6.25% Preferred - MER O
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MERPRO
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59022Y832
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12.
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Merrill Lynch Capital Trust I - 6.45% Preferred - MER K
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MERPRK
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590199204
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13.
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Merrill Lynch Capital Trust II - 6.45% Preferred - MER M
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MERPRM
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59024T203
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14.
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Merrill Lynch Capital Trust III - 7.375% Preferred - MER P
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MERPRP
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59025D207
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The Court in charge of this case is the United States District Court for the Southern
District of New York. The case is known as In Re Merrill Lynch & Co., Inc. Securities,
Derivative and ERISA Litigation, Master File No. 07-cv-9633 (JSR)(DFE).
However, the settlement described in this Notice applies only to the claims in the
securities class action cases and not the claims in the related derivative or ERISA
cases. Judge Jed Rakoff is the judge hearing this case. The people who sued are
called plaintiffs. Merrill Lynch and the other parties who were sued in this case
are the Defendants. The full list of Defendants appears on page 9 below. This case
is one of several related actions which were filed against Defendants and others
relating to Merrill Lynch’s exposures to, and disclosures relating to, subprime
mortgages, securities backed by subprime mortgages and related assets. All such
related cases were consolidated before Judge Rakoff under the caption In Re Merrill
Lynch & Co., Inc. Securities, Derivative and ERISA Litigation, Master File
No. 07-cv-9633 (JSR)(DFE).
The Notice was sent to you because you have a right to know about the proposed settlement
of this case, and about all of your options, before the Court decides whether to
approve the settlement. If the Court approves the settlement, and resolves any objections
to the settlement submitted by Settlement Class Members and any appeals are resolved
as explained below, then an administrator appointed by the Court will process the
claims received and distribute the payments to Settlement Class Members with valid
claims.
- What is this lawsuit about?
Beginning in October 2007, a number of class action complaints alleging violations
of federal securities laws were filed (the "Securities Action"), naming as defendants
Merrill Lynch & Co., Inc., Merrill Lynch, Pierce, Fenner & Smith, Inc., Citigroup
Global Markets, Morgan Stanley & Co., UBS Securities, Wachovia Capital Services
and Deloitte & Touche LLP, certain Merrill Lynch officers and directors, and others.
On December 31, 2007, certain plaintiffs moved to consolidate the Securities Action
and for appointment as lead plaintiff pursuant to the Private Securities Litigation
Reform Act ("PSLRA"). On January 2, 2008, the State Teachers Retirement System of
Ohio moved for appointment as lead plaintiff in the Securities Action.
On March 12, 2008, the Court consolidated the actions brought on behalf of investors
in Merrill Lynch securities and appointed State Teachers Retirement System of Ohio
as sole lead plaintiff in the Securities Action (the "Lead Plaintiff"). The Court
also approved Lead Plaintiff’s selection of Kaplan Fox & Kilsheimer LLP, Berger
& Montague, P.C., and Barrack, Rodos & Bacine as Co-Lead Counsel in the Securities
Action.
On May 21, 2008, Lead Plaintiff, together with additional plaintiff Gary Kosseff
(collectively, "Plaintiffs"), filed the Amended Complaint in the Securities Action.
Plaintiffs alleged claims against the Defendants under Sections 10(b), 14(a), and
20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Sections 11,
12(a)(2), and 15 of the Securities Act of 1933 ("Securities Act") on behalf of investors
in Merrill Lynch common stock and the Preferred Securities issued by Merrill Lynch
or its affiliates.
The Amended Complaint alleges that during the Settlement Class Period Merrill Lynch
accumulated financial exposure to U.S. subprime residential mortgage-related assets
and asset backed securities ("ABS"), collateralized debt obligations ("CDOs"), and
related exposures and financial instruments that reached $40 billion by the end
of June 2007. The Amended Complaint alleges that Defendants did not properly disclose
Merrill Lynch’s exposure to these assets until beginning October 5, 2007, when Merrill
Lynch began to disclose its exposures and began to initiate write-downs. By January
17, 2008, Merrill Lynch had written down over $24 billion in U.S. subprime ABS and
CDO exposures. Plaintiffs also allege: (a) that Defendants sought to minimize and/or
obscure Merrill Lynch’s exposure by falsely representing that Merrill Lynch’s risk
controls and hedging techniques were effectively mitigating and minimizing any impact
that subprime assets would have on Merrill Lynch; (b) that Defendants falsely led
investors to believe that the impact of subprime assets would be minimal on Merrill
Lynch; and (c) that by at least February 2007, Merrill Lynch’s U.S. subprime ABS
and CDO exposures had become substantially impaired and should have been materially
written down.
On or about July 28, 2008, Lead Plaintiff entered into a tolling agreement with
Citigroup Global Markets, Morgan Stanley & Co., UBS Securities, and Wachovia Capital
Markets LLC (collectively, the "Underwriter Defendants"), as a result of which Lead
Plaintiff agreed to voluntarily dismiss without prejudice the Underwriter Defendants
from the Securities Action. On August 5, 2008, the Court approved the voluntary
dismissal of the Underwriter Defendants.
On July 21, 2008, certain of the Defendants moved to dismiss the Amended Complaint.
Merrill Lynch also moved to strike certain allegations of the Amended Complaint,
which motion certain other of the Defendants also joined. On September 19, 2008,
Plaintiffs filed a consolidated opposition to Defendants’ motions to dismiss and
Merrill Lynch’s motion to strike. Plaintiffs also filed a motion to strike certain
arguments and documents Defendants submitted with their motions to dismiss.
On November 14, 2008, Defendants filed reply memoranda in further support of their
motions to dismiss, and in opposition to Plaintiffs’ motion to strike. Plaintiffs
filed a reply memorandum in further support of their motion to strike on November
14, 2008. On November 25, 2008, the Court issued an Order setting oral argument
on the pending motions to dismiss in the Securities Action for January 15, 2009.
On January 7, 2009, with the motions to dismiss the Securities Action pending, the
parties in the Securities Action agreed in principle to settle the Securities Action
on behalf of the Settlement Class Members, subject to certain conditions, including
approval by the Lead Plaintiff. On January 16, 2009, Lead Plaintiff notified Merrill
Lynch that it agreed to the proposed settlement. The settlement includes all claims
that Lead Plaintiff alleged or could have alleged in the Amended Complaint during
the Settlement Class Period as set forth in the definition of Released Claims on
page 8 below. The Settlement Class Period extends from October 17, 2006 through
and including December 31, 2008, the day before Merrill Lynch was acquired by Bank
of America.
- Why is this a class action?
In a class action, one or more persons and/or entities called class representatives,
sue on behalf of all persons and/or entities who have similar claims. All of these
persons and/or entities are collectively referred to as a Class, or individually,
as Class Members. One court resolves all of the issues in the case for all Class
Members, except for those Class Members who exclude themselves from the Class. In
the Notice, the Class is known as the Settlement Class and the Class Members are
known as the Settlement Class Members.
- Why is there a settlement?
The Court did not decide in favor of Plaintiffs or Defendants. Instead, Lead Plaintiff
and Defendants have agreed to settle this action. Lead Plaintiff has agreed to settle
this action based on the risks of continued litigation, and its conclusion and the
conclusion of Co-Lead Counsel that the proposed settlement is fair, reasonable and
adequate and, indeed, an excellent recovery for the members of the Settlement Class.
By settling, the Settlement Class avoids the cost and risks of continued litigation,
while at the same time the Settlement Class will receive substantial compensation.
Consequently, Lead Plaintiff and Co-Lead Counsel recommend approval of the settlement.
Merrill Lynch has agreed to the settlement to put this matter behind it and to avoid
the costs, distraction and risks of the litigation.
Lead Plaintiff and Co-Lead Counsel believe that there were many risks of continued
litigation in this case. For example, in their motions to dismiss, the Defendants
raised several defenses challenging the sufficiency of Plaintiffs’ allegations of
scienter – that is, whether the Defendants acted with the required intent
to deceive Merrill Lynch investors. The Defendants also asserted defenses concerning
whether the Plaintiffs have sufficiently alleged that the Defendants even made any
false or misleading statements relating to Merrill Lynch’s businesses in subprime
mortgages and related mortgage securities and other assets (or otherwise). They
have also argued that Merrill Lynch’s financial problems and Plaintiffs’ losses
were caused by the market-wide credit crisis that also impacted adversely several
other investment banks during the Settlement Class Period, and that any losses were
not caused by any improper conduct or false statements on Defendants’ part. Additionally,
the Defendants have asserted defenses concerning damages and related issues, among
others.
Lead Plaintiff and Co-Lead Counsel are also mindful that, even if the motions to
dismiss were denied, there exist inherent problems of proof under, and possible
other defenses to, the federal securities law violations asserted in the Securities
Action. For example, Lead Plaintiff and Defendants do not agree on whether there
were damages, and if so, the average amount of damages per share that would have
been recoverable if Plaintiffs were to have prevailed on each claim asserted in
the Securities Action. The issues on which they disagree include, among others:
(1) the appropriate method for determining the amount by which Merrill Lynch common
stock and Preferred Securities were allegedly artificially inflated (if at all)
during the Settlement Class Period; (2) the amount by which Merrill Lynch common
stock and Preferred Securities were allegedly artificially inflated (if at all)
during the Settlement Class Period; (3) the effect of various market forces influencing
the trading prices of Merrill Lynch common stock and Preferred Securities at various
times during the Settlement Class Period; (4) the extent to which external factors,
such as general market conditions, influenced the trading prices of Merrill Lynch
common stock and Preferred Securities at various times during the Settlement Class
Period; (5) the extent to which the various statements that Plaintiffs allege were
materially false or misleading influenced (if at all) the trading prices of Merrill
Lynch common stock and Preferred Securities at various times during the Settlement
Class Period; (6) the extent to which the various allegedly adverse material facts
that Plaintiffs allege were omitted influenced (if at all) the trading prices of
Merrill Lynch common stock and Preferred Securities at various times during the
Settlement Class Period; (7) whether the statements made were false or materially
misleading, and whether such statements or the facts allegedly omitted were material
or otherwise actionable under the federal securities laws; and (8) whether Plaintiffs
could rely on the fraud-on-the-market presumption of reliance in lieu of proving
actual reliance on Defendants’ allegedly false statements during the Settlement
Class Period by purchasers of Merrill Lynch common stock and Preferred Securities.
In the absence of any settlement, the parties would present factual and expert testimony
on each of these issues, and there is considerable risk that the Court may strike
one or more experts or that the Court or jury would resolve the inevitable "battle
of the experts" against Lead Plaintiff and the Settlement Class.
Although Lead Plaintiff believes that the claims it alleges have substantial merit,
Lead Plaintiff recognizes that these defenses present serious contingent risk. Further,
even if the Defendants’ motions to dismiss were denied, the Defendants would likely
have continued to assert these defenses throughout the litigation. And even if Lead
Plaintiff survived Defendants’ efforts to obtain pre-trial dismissal and prevailed
through trial, the Defendants could be expected to appeal and continue to assert
one or more of these defenses. Lead Plaintiff and Co-Lead Counsel have also considered
several other factors, including Merrill Lynch’s potential ability to satisfy a
judgment for an amount substantially in excess of the Settlement Fund even assuming
Lead Plaintiff prevailed through trial and on appeal.
Lead Plaintiff and Co-Lead Counsel also recognize and acknowledge the expense and
length of continued proceedings necessary to prosecute the Securities Action against
the Defendants through trial and through appeals. Co-Lead Counsel have also taken
into account the uncertain outcome and the risk of any litigation, especially in
complex actions such as the Securities Action, as well as the difficulties, costs,
and delays inherent in such litigation.
Co-Lead Counsel have conducted extensive and lengthy discussions and arm’s-length
negotiations with counsel for Defendants with respect to the proposed settlement
to achieve the best relief possible consistent with the interests of the Settlement
Class. Co-Lead Counsel have retained damage experts who assisted in estimating potential
damages and in constructing the Plan of Allocation set out at the end of the Notice.
Accordingly, Lead Plaintiff and Co-Lead Counsel believe that the settlement provides
an excellent monetary recovery for the Settlement Class based on the claims asserted,
the procedural posture of the Securities Action, the evidence developed, and the
damages that might be proven by the Settlement Class.
The settlement is embodied in the parties’ Stipulation and Agreement of Settlement
dated February17, 2009(the "Settlement Stipulation"). The parties’ Settlement Stipulation
has been filed with the Court and is available at the link on the left entitled
"Court Documents".
Defendants have denied, and continue to deny, each and every claim and contention
alleged by Lead Plaintiff in the Securities Action. Defendants have expressly denied,
and continue to deny, all charges of wrongdoing or liability against them arising
out of any of the conduct, statements, acts or omissions alleged, or that could
have been alleged, in the Securities Action. Defendants believe that Lead Plaintiff’s
allegations of fraud have no merit and that a class could not be certified under
the relevant federal class action rule. Defendants have also denied, and continue
to deny, among other things, the allegations that Lead Plaintiff or the Settlement
Class has suffered damage, that the prices of Merrill Lynch common stock and Preferred
Securities were inflated artificially by reasons of alleged misrepresentations,
non-disclosures or otherwise, or that Lead Plaintiff or the Settlement Class was
harmed by the conduct alleged in the Securities Action.
Nonetheless, Defendants have concluded that further conduct of the Securities Action
would be protracted and expensive, and that it is desirable that the Securities
Action be fully and finally settled in the manner and upon the terms and conditions
set forth in the Settlement Stipulation to avoid further costs and distraction associated
with continued litigation.
The settlement is subject to certain conditions under which the parties may terminate
the settlement, including conditions based on the number and extent of the exclusions
received.
WHO IS IN THE SETTLEMENT
- How do I know if I am part of the settlement?
To see if you will get money from this settlement, you first have to decide if you
are a member of the Settlement Class in this Action. The Court decided that everyone
who fits the following description is a Settlement Class Member:
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All persons who purchased or acquired Merrill Lynch common stock or the Preferred
Securities (listed above) during the time period from October 17, 2006 through and
including December 31, 2008 (the "Settlement Class Period").
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The Court has also decided that pending final determination of whether the settlement
summarized in the Notice should be approved, all Settlement Class Members, and anyone
who acts or purports to act on their behalf, are prohibited from instituting or
commencing any action which asserts Released Claims against any of the Released
Parties (as those terms are defined in the answer to Question 11 below).
- Are there exceptions to being included?
Even if you otherwise fall within the definition of the Settlement Class described
in the answer to Question 5 above, you are not a Settlement Class Member if: (1)
you are a Defendant or any of their affiliates; (2) you are Temasek Capital (Private)
Limited or Davis Selected Advisors L.P., or any of their affiliates; or (3) you
are or were a present or former employee of Merrill Lynch and its subsidiaries and
you acquired Merrill Lynch common stock or Preferred Securities through exercise
of warrants and/or as compensation. Also, if you exclude yourself from the Settlement
Class, by following the steps described in the answer to Question 12 below, you
will not be a part of the Settlement Class and therefore will not be entitled to
share in the settlement.
If one of your mutual funds owns Merrill Lynch common stock or any of the Preferred
Securities listed above, that alone does not make you a Settlement Class
Member. You are a Settlement Class Member only if you purchased or otherwise acquired
Merrill Lynch common stock or any of the Preferred Securities during the Settlement
Class Period. Contact your broker to see if during the Settlement Class Period you
owned, held or acquired Merrill Lynch common stock or any of the Preferred Securities.
- I’m still not sure if I am included.
If you are still not sure whether you are included in the Settlement Class, you
can ask for free help, by calling the Claims Administrator at 1-877-576-9980 or
email at info@MerrillLynchLitigation.com
for more information. Or you can fill out and return the claim form attached to
the Notice to see if you qualify.
THE SETTLEMENT BENEFITS – WHAT YOU GET
- What does the settlement provide?
The parties arrived at a proposed settlement of the lawsuit which is embodied in
the Settlement Stipulation signed by their attorneys. The parties’ agreement, by
itself, is not sufficient for the settlement to be official. Instead, the proposed
settlement requires the Court’s approval before it can become official. The terms
of the proposed settlement are summarized below, and the full settlement terms are
in the Settlement Stipulation. You can obtain a copy of the Settlement Stipulation
by writing to Co-Lead Counsel: Frederic S. Fox, Kaplan Fox & Kilsheimer LLP, 850
Third Avenue, 14th Floor, New York, NY 10022, telephone (212) 687-1980; Lawrence
J. Lederer, Berger & Montague, P.C., 1622 Locust Street, Philadelphia, PA 19103,
telephone (215) 875-3000; or M. Richard Komins, Barrack, Rodos & Bacine, 3300 Two
Commerce Square, 2001 Market Street, Philadelphia, PA 19103, telephone (215) 963-0600.
- What is the Settlement Fund?
Pursuant to the proposed settlement, the $475 million cash Settlement Fund has been
established for the Settlement Class in full and complete settlement of the Securities
Action. The Settlement Fund has already been placed into an escrow account established
by Co-Lead Counsel for the benefit of the Settlement Class, and has been invested
in interest-bearing instruments or funds backed by the United States government
or its agencies, pending final approval of the settlement by the Court as provided
in the parties’ Settlement Stipulation. If the settlement is not approved by the
Court, Defendants are entitled to a refund of the Settlement Fund less certain notice
costs and taxes, also as set forth in the parties’ Settlement Stipulation.
It is estimated that prior to a secondary offering of Merrill Lynch common stock
on July 29, 2008, approximately 446.6 million shares of Merrill Lynch common stock
were available for public trading by investors (commonly known as the "float") during
the Settlement Class Period, and may have sustained damages caused by one of the
"corrective disclosures" identified by Co-Lead Counsel and their economic and damages
consultant – that is, a disclosure that at least partially revealed the true extent
of Merrill Lynch’s exposure to subprime mortgages, ABS, CDOs and related investments.
(See the "Plan of Allocation" link on the left.) Similarly, it is estimated that
following the secondary offering of Merrill Lynch common stock on July 29, 2008,
approximately 814.8 million shares of Merrill Lynch common stock were in the float
and may have sustained damages following an additional disclosure on August 7, 2008.
Between January 17, 2008 and August 6, 2008, the weighted average float is approximately
465 million shares. With regard to the 13 issues of Preferred Securities, it is
estimated that the float was approximately 245.2 million shares throughout the entire
Settlement Class Period. As used in the Notice, all shares of common stock or Preferred
Securities in the float are "damaged shares" – that is shares that have incurred
damage as a result of one or more of the "corrective disclosures" identified in
the Plan of Allocation.
As a result, for shares purchased by Settlement Class Members on or before January
16, 2008, it is estimated that the $475 million recovery represents an average recovery
of $0.88 1 per damaged common share in the float and $0.165 per damaged share of
Preferred Securities in the float. For shares purchased by Settlement Class Members
after January 16, 2008, it is estimated that the settlement represents an average
recovery of $0.084 per damaged common share in the weighted average float and $0.007
per damaged share of Preferred Securities in the float. These figures are only estimates
and assume that claims are filed on behalf of 100% of the estimated amount of damaged
shares. Also, these figures are before deduction of any fees and costs that the
Court may award.
After deducting the requested attorneys’ fees of up to 7.82% of the Settlement Fund
and up to $2,500,000 in reimbursement of costs and expenses (see Question 16 below),
the net recovery is estimated to be $0.807 per damaged common share and $0. 151
per damaged share of Preferred Securities purchased during the Settlement Class
Period on or before January 16, 2008, and $0.077 per damaged common share and $0.006
per damaged share of Preferred Securities purchased during the Settlement Class
Period after January 16, 2008. These are only estimates. These net recovery figures
are before deducting any costs incurred in providing notice of the settlement or
in processing the claims received from Settlement Class Members (to the extent not
offset by interest income earned by the Settlement Fund), and your actual recovery
may vary. (See answer to Question 8(b) below.)
Under the federal securities laws, persons who purchased Merrill Lynch common stock
or Preferred Securities may recover, in general, only for losses proximately caused
by disclosures correcting Defendants’ prior misleading statements, and may not recover
for any price declines caused by general market or industry factors or by disclosures
of other negative information not alleged to have corrected prior misstatements.
It is likely, therefore, that if Plaintiffs were to prevail completely in establishing
liability on every single claim at trial, and if all claims were upheld through
all appeals, that the recovery for investors who purchased their Merrill Lynch common
stock or Preferred Securities would be considerably less than the market losses
on these Securities. Defendants do not agree that any portion of the market declines
could be recovered even if liability were to be established.
After the deduction of all fees, costs and other expenses as approved by the Court
and any taxes, the remaining proceeds in the Settlement Fund (the "Net Settlement
Fund") will be available to pay to Settlement Class Members who file valid Proof
of Claim and Release forms and otherwise meet all of the requirements of the Plan
of Allocation.
- How can I compute my Payable Claim?
Your actual recovery from the Net Settlement Fund will vary from the estimates set
out above depending on: (1) the date you purchased your Merrill Lynch common stock
or Preferred Securities, (2) the number of shares purchased and the price you paid,
(3) the date of any sales of your Merrill Lynch common stock or Preferred Securities,
(4) the sales price you received, (5) the expense of administering the claims process,
(6) attorneys’ fees and expenses awarded by the Court, (7) interest income received
and taxes paid by the Settlement Fund, (8) the number of eligible shares of common
stock and Preferred Securities purchased by other Settlement Class Members who elect
to participate in the settlement, and (9) the Recognized Losses and Payable Claims
of all other valid approved claimants computed in accordance with the Plan of Allocation.
Defendants take no position on the Plan of Allocation.
By following the Plan of Allocation, you can calculate your Payable Claim. Payments
from the Net Settlement Fund are likely to be significantly less than each valid
claimant’s Payable Claim. The claims administrator appointed by the Court, Rust
Consulting, Inc. (the "Claims Administrator") will distribute the Net Settlement
Fund according to the Plan of Allocation after the deadline for submission of Proof
of Claim and Release forms has passed, and all other claims have been processed.
HOW YOU GET A PAYMENT – SUBMITTING A CLAIM FORM
- How can I get a payment?
To qualify for payment, you must send in a Proof of Claim and Release form. This
form is attached to the Notice. You may also obtain a claim form by clicking on
the link on the left entitled "Proof of Claim". Please read the instructions carefully,
fill out the form, sign it in the location indicated, include all the documents
the form asks for, and mail the claim form and documentation, postmarked not later
than September 9, 2009, to:
Claims Administrator
Merrill Lynch & Co., Inc. Securities Litigation
c/o Rust Consulting, Inc.
P.O. Box 9444
Minneapolis, MN 55440-9444
The Claims Administrator will process your claim and advise you if you are an "Authorized
Claimant" – meaning whether your claim satisfies the requirements approved by the
Court.
- Do I need to submit supporting documentation?
Yes. You must attach to the Proof of Claim (for each transaction) original or legible
copies of either:
- Broker confirmation slips;
- Monthly brokerage statements;
- Year-end brokerage statements;
- A letter from your broker on the firm’s letterhead; or
- Other satisfactory proof confirming the particulars of each purchase and sale of
the securities between, inclusive.
- If you have multiple accounts that you purchased shares through, can you use
the same Proof of Claim form for all your accounts?
Each account held during the Class Period should be filed separately. Therefore,
photocopy the Proof of Claim form that you have and submit an executed Proof of
Claim form for each account held.
- Can you file electronically?
Certain claimants with large numbers of transactions may request, or may be requested,
to submit information regarding their transactions in electronic files. All Claimants
MUST submit a manually signed paper Proof of Claim form listing all their transactions
whether or not they also submit electronic copies. If you wish to file your claim
electronically, you must click on the box on the left of the screen with the name
"Broker Template" to obtain the required file layout or you can contact the Claims
Administrator at (877) 576-9980.
- When would I receive my payment?
The Court will hold a Hearing at 4:00 p.m. on July 27, 2009, to decide whether to
approve the settlement (the "Hearing" or "Fairness Hearing"). The Hearing date can
be changed by the Court. Upon approval of the settlement and the resolution of any
appeals, the Claims Administrator will process all of the claim forms. Everyone
who sends in a claim form will be informed of the approval or disapproval of their
claim. Before any distribution can occur, the Court will be asked to approve any
distribution. Please be patient.
- What am I giving up to get a payment or stay in the Settlement Class?
Unless you exclude yourself, you will remain in the Settlement Class. That means
that if the settlement is approved by the Court, and the settlement becomes effective
under the terms of the Settlement Stipulation (the "Effective Date"), you and all
Settlement Class Members (including any Settlement Class Member who is a party to
any other action, arbitration or other proceeding), will release (that is, can’t
sue, continue to sue, or be part of any other lawsuit or arbitration) all "Released
Claims" and "Unknown Claims" against, and in favor of, all of the "Defendants" and
all of the other "Released Parties" as those terms are defined in the Settlement
Stipulation and also below. It also means that all of the Court’s orders will apply
to you and legally bind you (and your heirs, joint tenants, tenants in common, beneficiaries,
executors and administrators, successors and assigns), even if you receive no allocation.
"Released Claims" means any and all claims, actions, debts, demands, set-offs
(both legal and equitable), causes of action, rights or liabilities whatsoever (including,
but not limited to, any claims for damages, equitable relief, interest, attorneys’
fees, expert or consulting fees, and any other costs, expenses or liability whatsoever),
whether based on federal, state or local statutory or common law or any other law,
rule or regulation, whether fixed or contingent, accrued or un-accrued, liquidated
or un-liquidated, at law or in equity, matured or un-matured, whether direct, representative,
class, individual or in any other form, including both known claims and Unknown
Claims (defined below), that have been asserted in the Securities Action by the
Settlement Class Members or any of them against any of the Released Parties, or
which otherwise were or could have been at issue in the Securities Action, or that
have been or could have been asserted in any forum by the Settlement Class Members
or any of them against any of the Released Parties which arise out of or relate
to or are based in whole or in part upon any of the allegations, transactions, facts,
matters or occurrences, representations, disclosures, statements or omissions alleged,
involved, set forth, or referred to in the Amended Complaint, in connection with
such Settlement Class Members’ purchase or acquisition of Merrill common stock or
the Preferred Securities during the Settlement Class Period. Released Claims includes
only the claims that were or could have been asserted on behalf of purchasers or
acquirers during the Settlement Class Period of only Merrill common stock and the
Preferred Securities.
The definition of "Released Claims" above specifically excludes the claims
asserted in (1) all derivative actions consolidated into the docket number 07cv9696
by order dated March 12, 2008, the derivative action captioned Lambrecht v. O’Neal,
08cv6582, and all derivative actions involving substantially similar facts; (2)
the ERISA actions consolidated into the docket number 07cv10268 by order dated March
12, 2008; and (3) the claims relating to the following securities asserted in the
action captioned Louisiana Sheriffs’ Pension and Relief Fund, et al. v. Merrill
Lynch & Co., Inc., et al., 08cv09063: 8.625% Non-Cumulative Preferred Securities,
Series 8 (CUSIP: 59023V373); Medium-Term Notes, Series C (CUSIP: 5901 8YYR6); Medium-Term
Notes, Series C (CUSIP: 5901 8YYW5); 6.11% Subordinated Notes due January 29, 2037
(CUSIP: 59022CAJ2); 5.70% Subordinated Notes due May 2, 2017 (CUSIP: 59022CCS0);
Medium-Term Notes, Series C (CUSIP: 59018YE72); 6.05% Medium-Term Notes, Series
C (CUSIP: 5901 8YJ36); 6.40% Medium-Term Notes, Series C (CUSIP: 5901 8YJ69); Accelerated
Return Notes (CUSIP: 59022W356); 5.45% Medium-Term Notes, Series C (CUSIP: 59018YM40);
6.15% Medium-Term Notes, Series C (CUSIP: 5901 8YN56); 6.875% Medium-Term Notes,
Series C (CUSIP: 5901 8YN64); 7.75% Subordinated Notes (CUSIP: 59023VAA8). Released
Claims also specifically excludes the claims asserted in the securities actions
captioned, Sklar v. Bank of America Corp., et al., 09-cv-580 (S.D.N.Y. filed Jan.
21, 2009); Boorn v. Bank of America Corp., et al., 09-cv-01 59 (N.D. Ga. filed Jan.
21, 2009); and Zitner v. Bank of America Corp., et al., 09-cv-00881 (S.D.N.Y. filed
Jan. 30, 2009), as well as any actions involving substantially similar facts. It
is expressly understood that no release is given to any Released Party in connection
with any purchase, acquisition, or retention of Bank of America Corp. ("BAC") securities
by any purchaser, acquirer, or holder of BAC securities.
"Defendants" means Merrill Lynch & Co., Inc.; Merrill Lynch, Pierce, Fenner
& Smith Incorporated, Merrill Lynch Capital Trust I, Merrill Lynch Capital Trust
II, Merrill Lynch Capital Trust III, E. Stanley O’Neal, Ahmass L. Fakahany, Gregory
J. Fleming, Jeffrey N. Edwards, Lawrence A. Tosi, Armando M. Codina, Virgis W. Colbert,
Carol T. Christ, Alberto Cribiore, John D. Finnegan, Judith Mayhew Jonas, Aulana
L. Peters, Joseph W. Prueher, Ann N. Reese, Charles O. Rosotti, Citigroup Global
Markets, Morgan Stanley & Co., UBS Securities, Wachovia Capital Services and Deloitte
& Touche LLP.
"Released Parties" means Defendants and their respective heirs, executors,
personal representatives, estate and administrators; their respective past, present
and future parent entities, affiliates, related parties, subsidiaries, predecessors
and successors; and each of their respective, past, present and future assigns,
insurers, partners, officers, directors, controlling persons, representatives, employees,
agents, attorneys, counsel, underwriters, and financial or investment advisors.
"Unknown Claims" any and all Released Claims that Plaintiffs and any Settlement
Class Member does not know or suspect to exist in his, her or its favor at the time
of the release of the Released Parties. With respect to any and all Released Claims,
the parties stipulate and agree that upon the Effective Date of the settlement,
Lead Plaintiff shall expressly, and each Settlement Class Member shall be deemed
to have, and by operation of the Order and Final Judgment shall have, expressly
waived any and all provisions, rights and benefits conferred by any law of any state
or territory of the United States, or principle of common law, which is similar,
comparable or equivalent to California Civil Code, Section 1542, which provides:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor.
Lead Plaintiff and Defendants acknowledge, and Settlement Class Members by operation
of law shall be deemed to have acknowledged, that the inclusion of "Unknown Claims"
in the definition of Released Claims was separately bargained for and was a key
element of the settlement.
In addition, Lead Plaintiff and all Settlement Class Members, whether or not any
such person submits a Proof of Claim, or otherwise shares in the Settlement Fund,
on behalf of themselves and each of their predecessors, successors, assigns, personal
representatives, heirs and any other Person who purports to claim through them,
will be deemed by this settlement to release and forever discharge the Released
Parties from any and all of the Released Claims. Assuming the settlement is approved,
Lead Plaintiff and all Settlement Class Members, and anyone claiming through or
on behalf of any of them, will be forever barred and enjoined from commencing, instituting,
prosecuting or continuing to prosecute any action or other proceeding in any court
of law or equity, arbitration tribunal, administrative forum, or other forum of
any kind, asserting against any of the Released Parties, and each of them, any of
the Released Claims, as set forth in the parties’ Settlement Stipulation.
Also assuming the settlement is approved, all claims for contribution, indemnification,
or any other form of relief by other alleged joint tort feasors against the Released
Parties based upon, arising out of, relating to, or in connection with the Released
Claims of the Settlement Class or any Settlement Class Member will be barred, extinguished,
discharged, satisfied and otherwise rendered unenforceable to the full extent permitted
by law, and the future filing of any such claims enjoined, also as set forth in
the parties’ Settlement Stipulation.
EXCLUDING YOURSELF FROM THE SETTLEMENT
- What do I do if I decide that I do not want to be part of the settlement?
If you do not want to receive a payment from this settlement, and you want to keep
the right to sue or continue to sue Defendants on your own about the legal and factual
issues in this case, then you must take steps to get out of the settlement. This
is called excluding yourself – or is sometimes referred to as "opting out" of the
Settlement Class.
To exclude yourself from the settlement, you must send a letter by mail stating
that you want to be excluded from the Settlement Class.
Be sure to include your name, address, telephone number, a statement requesting
exclusion from the Settlement Class and your signature. Please also provide a complete
description of your purchases and sales in Merrill Lynch common stock and Preferred
Securities during the Settlement Class Period, including the dates, the number of
shares, and the prices paid and received per share for each purchase and sale. Please
also include the amount of shares of Merrill Lynch common stock or Preferred Securities
held by you, if any, as of the close of business on December 31, 2008. You must
mail your exclusion request, postmarked no later than July 6, 2009, and send it
to:
Claims Administrator
Merrill Lynch & Co., Inc. Securities Litigation
c/o Rust Consulting, Inc.
P.O. Box 9444
Minneapolis, MN 55440-9444
You cannot exclude yourself on the phone or by e-mail. If you ask to be excluded,
you will not receive a settlement payment, and you cannot object to the settlement.
You will not be legally bound by anything that happens in this lawsuit.
- If I do not exclude myself, can I sue Defendants for the same thing later?
No. Unless you exclude yourself, you give up any right to sue (or bring arbitration
claims against) Defendants for the claims that this settlement resolves. If you
have a pending lawsuit or arbitration proceeding relating to the claims in this
case, it is important that you speak to your lawyer in that case immediately. You
must exclude yourself from this Settlement Class to continue your own lawsuit or
arbitration. Remember, the exclusion deadline is July 6, 2009.
- If I exclude myself, can I receive money from this settlement?
No. If you exclude yourself, do not send in a claim form to ask for any money.
THE LAWYERS REPRESENTING YOU
- Do I have a lawyer in this case?
The Court appointed the law firms of: Kaplan Fox & Kilsheimer LLP, 850 Third Avenue,
14th Floor, New York, NY 10022, telephone (212) 687-1980; Berger & Montague, P.C.,
1622 Locust Street, Philadelphia, PA 19103, telephone (215) 875-3000; and Barrack,
Rodos & Bacine, 3300 Two Commerce Square, 2001 Market Street, Philadelphia, PA 19103,
telephone (215) 963-0600, to represent you and other Settlement Class Members in
this case. These lawyers are called Co-Lead Counsel or Class Counsel. You will not
be charged separately for these lawyers. If you want to be represented by your own
lawyer, you may hire one at your own expense.
- How will the lawyers be paid?
Co-Lead Counsel have expended considerable time litigating this case on a contingent
fee basis. They have also advanced the expenses of litigation including experts’
fees with the expectation that if they were successful in recovering money for the
Settlement Class, they would receive fees and be reimbursed for their expenses from
the Settlement Fund, as is customary in this type of litigation. Accordingly, on
or before the July 27, 2009 Fairness Hearing, Co-Lead Counsel will file a motion
asking the Court to award them attorneys’ fees in an amount of up to $37,125,000
(or approximately 7.82% of the Settlement Fund), plus any interest earned thereon,
together with reimbursement of costs and expenses Co-Lead Counsel incurred and disbursed
on behalf of the Settlement Class in an amount estimated not to exceed $2,500,000.
For shares purchased by Settlement Class Members on or before January 17, 2008,
the requested fees and expenses are estimated to amount to an average of $0.073
per damaged common share and $0.014 per damaged share of Preferred Securities. For
shares purchased during the Settlement Class Period, but after January 16, 2008,
the requested fees and expenses are estimated to amount to an average of $0.007
per damaged common share and $0.001 per damaged share of Preferred Securities. In
addition, Plaintiffs, including the Lead Plaintiff, reserve the right to seek approval
from the Court at the Fairness Hearing for reimbursement from the Settlement Fund
for the reasonable costs and expenses they have incurred in conducting this litigation
on behalf of the Settlement Class.
These average per share figures are based on the estimated number of shares of Merrill
Lynch common stock and Preferred Securities available in the float, as described
in response to Question 8(a) above. The Court may award a different amount. Any
amounts awarded by the Court will come out of the Settlement Fund. Any Settlement
Class Member may present objections to the motion for an award of attorneys’ fees
and reimbursement of expenses.
OBJECTING TO THE SETTLEMENT OR FEES
- How do I tell the Court that I do not like the settlement, Plan of Allocation
or the request for fees?
If you are a Settlement Class Member, you can object to the settlement if you do
not like any part of it, including the Plan of Allocation. You can state why you
think the Court should not approve it. Similarly, you may object to Co-Lead Counsel’s
motion for approval of attorneys’ fees and reimbursement of expenses or any part
of it. The Court will consider your views. To object, you must send a written objection
stating that you object to the settlement or attorneys’ fees in the Securities Action
which is part of In Re Merrill Lynch & Co., Inc. Securities, Derivative and ERISA
Litigation, Master File No. 07-cv-9633 (JSR)(DFE). Be sure to include your
name, address, telephone number, your signature, proof of number of shares of Merrill
Lynch common stock or Preferred Securities that you purchased and sold during the
Settlement Class Period, and the reasons you object to any part of the settlement
or the motion for attorneys’ fees and expenses. Your objection must be mailed or
hand-delivered so that it is received on or before July 6, 2009, and be filed
with the Clerk of Court and sent to Co-Lead Counsel and Counsel for the Defendants,
at each of the following five addresses:
|
Court |
Plaintiffs’ Co-Lead Counsel |
Merrill Lynch’s Counsel |
Clerk of the Court
United States District Court
U.S. Courthouse
500 Pearl Street, Room 1930
New York, NY 10007-1312
|
Frederic S. Fox, Esq.
Kaplan Fox & Kilsheimer, LLP
850 Third Avenue, 14th Floor
New York, NY 10022
-and-
Lawrence J. Lederer, Esq.
Berger & Montague, P.C.
1622 Locust Street
Philadelphia, PA 19103
-and
M. Richard Komins, Esq.
Barrack, Rodos & Bacine
3300 Two Commerce Square
2001 Market Street
Philadelphia, PA 19103
|
Jay B. Kasner, Esq.
Skadden,Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036
|
- What is the difference between objecting and requesting exclusion?
Objecting is simply telling the Court that you do not like something about the settlement,
the Plan of Allocation or the motion for attorneys’ fees and expenses. You can object
only if you stay in the Settlement Class. Excluding yourself is telling the Court
that you do not want to be part of the Settlement Class. If you exclude yourself,
you have no basis to object because the case no longer affects you. If you exclude
yourself, you will be unable to share in the settlement.
THE COURT’S FAIRNESS HEARING
- When and where will the Court decide whether to approve the settlement?
The Court will hold the Fairness Hearing at 4:00 p.m. on July 27, 2009, at the United
States District Court for the Southern District of New York, Daniel Patrick Moynihan
United States Courthouse, 500 Pearl Street, New York, NY 10007. The Fairness Hearing
date can be changed by the Court without further notice to the Settlement Class.
At this Fairness Hearing, the Court will consider whether the settlement is fair,
reasonable and adequate and related matters, including how much to award to Co-Lead
Counsel for attorneys’ fees and expenses. You may attend and ask to speak. If there
are objections, the Court will consider them. The Court will listen to people (or
their counsel) who have submitted a written objection and who have submitted a separate
written notice of their intention to appear and speak at the Fairness Hearing ("Notice
of Intention to Appear"), mailed or hand delivered so that it is received no later
than July 6, 2009 by the Clerk of the Court and each of the four law firms
listed in the chart following Question 17 above. At or after the Fairness Hearing,
the Court will decide whether to approve the settlement and the Plan of Allocation,
how much to award to Co-Lead Counsel for attorneys’ fees and expenses, and any separate
request for reimbursement of reasonable costs and expenses by the Plaintiffs. We
cannot predict how long these decisions will take.
- Do I have to come to the Fairness Hearing?
No. Co-Lead Counsel will answer any questions the Court may have on behalf of Settlement
Class Members. But, you are welcome to come at your own expense. If you send an
objection, you do not have to come to Court to talk about it. As long as you mailed
your written objection on time, the Court will consider it. You may also attend
or pay your own lawyer to attend to speak in support of any objection you may have
filed, as long as you have followed the instructions set forth in the answer to
Question 21 below. Nevertheless, it is not necessary for you or your lawyer to attend
or speak at the Fairness Hearing.
- May I speak at the Fairness Hearing?
If you have submitted a written objection to the settlement, the Plan of Allocation,
the motion of Co-Lead Counsel for attorneys’ fees and expenses or any other aspect
of the settlement and follow the instructions set out in response to Questions 17,
19 and 20 above, or the Court otherwise orders, you (or your counsel) may speak
at the Fairness Hearing in support of your objection. To do so, along with your
written objection, please be certain to also file and serve your Notice of Intention
to Appear as stated in the answers to Questions 17 and 19 above. Unless the Court
allows, you cannot speak at the Fairness Hearing if you exclude yourself or if you
do not follow the instructions set forth in response to Questions 17, 19 and 20
above.
IF YOU DO NOTHING
- What happens if I do nothing at all?
If you do nothing, and you are a member of the Settlement Class, you will not receive
any money from this settlement but you will be bound by all judgments entered, whether
favorable or unfavorable to the Settlement Class. Unless you exclude yourself, you
will not be able to start a lawsuit, continue with a lawsuit, or be part of any
other lawsuit against Defendants about the legal and factual issues in this case,
ever again.
GETTING MORE INFORMATION
- How do I obtain more information about the settlement?
To obtain more information about the settlement, the claims asserted or any other
issue pertaining to this case or the settlement, you may contact the Claims Administrator,
Merrill Lynch & Co., Inc. Securities Litigation, c/o Rust Consulting, Inc., P.O.
Box 9444, Minneapolis, MN 55440-9444, or any one of Co-Lead Counsel, Kaplan Fox
& Kilsheimer LLP; Berger & Montague, P.C.; or Barrack, Rodos & Bacine, at their
addresses listed in the answer to Question 17 above.
SPECIAL NOTICE TO SECURITIES BROKERS AND OTHER NOMINEES
If you purchased Merrill Lynch common stock or any of the listed Preferred Securities
during the Settlement Class Period as nominee for a beneficial owner, then within
ten (10) days after you receive this Notice, you must either: (a) send a copy of
this Notice and the accompanying Proof of Claim and Release form by first-class
mail to all such beneficial owners; or (b) provide a list, electronically if possible,
of the names and addresses of such beneficial owners to the Claims Administrator:
Merrill Lynch & Co., Inc. Securities Litigation
c/o Rust Consulting, Inc.
P.O. Box 9444
Minneapolis, MN 55440-9444
1-877-576-9980
Email: info@MerrillLynchLitigation.com
If you chose option (a) above, you may request enough Notice forms from the Claims
Administrator (at no charge to you) to complete your mailing and send a written
statement to the Claims Administrator confirming that the mailing was made as directed,
and identifying the persons and the addresses to whom this Notice was sent. You
may seek reimbursement of your reasonable expenses actually incurred in complying
with these directives, subject to approval of Co-Lead Counsel or the Court. All
communications concerning this matter should be addressed to the Claims Administrator.
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