MetroPCS is suing Merrill Lynch alleging that the broker invested $133.9 million of its cash in 10 auction-rate securities. Nine of the ten were issued by collateralized debt obligations, which were underwritten by Merrill. The suit charges Merrill with fraud, negligence and breach of fiduciary duty for making the risky investments.
"We believe the firm acted appropriately in its dealing with Metro PCS and made the relevant and necessary disclosures to them," Merrill said in a statement. It was "surprised" by the suit because it had been working "amicably with Metro PCS...as late as last week."
For more on the suit:
- read this article [1] from the WSJ (sub. req.)
Links:
[1] http://online.wsj.com/article/SB119275660210964338.html?mod=telecommunications_primary_hs