Bank of America Corp.'s Merrill Lynch unit won an appeal of a ruling dismissing an investor suit over auction-rate securities.
A federal appeals court in New York ruled today that Merrill Lynch provided the investor, Colin Wilson, with sufficient information about its practice of propping up auctions in the securities by submitting its own bids, barring his claim that Merrill misled investors about the securities' liquidity. Wilson had appealed a lower court's dismissal of the suit.
"Merrill's particular disclosures sufficiently alerted investors in Merrill ARS of the likelihood that the interest rates and apparent liquidity of these ARS reflected Merrill's own intervention in these auctions rather than the natural interplay of supply and demand," U.S. Circuit Judge Robert Katzmann wrote on behalf of a three-judge panel.
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