Merrill Lynch Fends Off Class Action From $415M Settlement

Merrill Lynch for now has dodged a class action stemming from its $415 million settlement with the SEC to resolve claims it misused client money.

The U.S. District Court for the Southern District of California ruled July 18 that Merrill Lynch customer James Jiao’s putative class suit is barred by the Securities Litigation Uniform Standards Act, but he can file an amended complaint. That law prohibits plaintiffs in class securities suits from framing their claims as state-law violations to circumvent strict federal pleading requirements.

The suit claimed the Bank of America Corp. unit engaged in common law fraud and violated ...