Harvard Settles Fraud Suit Filed Against Merrill Lynch

Harvard University and Merrill Lynch & Co. have settled a lawsuit in which the school accused the securities firm of defrauding it of $45 million in a 1989 stock transaction.

Daniel Steiner, vice president and general counsel at Harvard, said Tuesday that the settlement was “very, very satisfactory.”

He said both sides had agreed not to discuss the terms of the settlement.

Harvard had contended in U.S. District Court that Merrill Lynch had sold the university $45 million in securities of Lomas Financial Corp. with the knowledge that the firm was near bankruptcy.

Harvard bought the securities in May, 1989, one month before Texas-based Lomas announced a $200-million loss.

“Merrill Lynch is pleased that it has been able to settle the litigation with Harvard,” William Clark, the firm’s vice president for corporate communications, said in a prepared statement.

“Harvard is a valued client,” Clark said. “We are delighted to have resumed full business relations and look forward to a mutually rewarding relationship in the future.”

Negotiations are continuing in seven related cases. One other company, Marubeni America Corp., has also settled for an undisclosed amount, company officials said.