Merrill Lynch Ordered to Defend Fraud Claims
- Share via
Merrill Lynch & Co. must defend claims that it inflated revenue at the energy-trading unit it sold to Allegheny Energy Inc. for more than $490 million, a Manhattan judge ruled.
U.S. District Judge Harold Baer refused to dismiss fraud and contract claims that Merrill overstated the performance of Global Energy Markets and hid the unit’s sham trades with Enron Corp. Allegheny says Merrill wanted to rid itself of a troubled subsidiary run by a manager who engaged in “highly questionable -- if not outright criminal -- business practices.”
The manager, Daniel Gordon, is being investigated for embezzling $43 million from Merrill and will be criminally charged with money laundering, according to a letter written by a U.S. Justice Department official to Swiss law enforcement authorities in April.
Merrill Lynch spokesman William Halldin declined to comment.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
