Boynton Investor Sues Merrill After Tech Fund Loses 90% Of ValueOct 10, 2002 | South Florida Sun-Sentinel A Boynton Beach man is suing Merrill Lynch & Co. to recover lost investment money, but the investment bank said the suit is "baseless."
The suit, filed this week in Broward County Circuit Court, seeks class-action status.
Thomas Strano, 54, said in the complaint that the investment firm misled him by not disclosing key information when Strano purchased the Merrill Lynch Focus Twenty Fund. The Focus Twenty Fund invested in technology, telecommunications and Internet companies. It raised $1 billion from investors, according to the lawsuit.
Strano's suit is just one of dozens of lawsuits filed against the Wall Street giant in the wake of a $100 million fine levied against the investment bank this past spring by New York and 49 other states.
The settlement announced May 21 followed an inquiry by New York Attorney General Eliot Spitzer that accused Merrill Lynch analysts of misleading investors by promoting stocks that they themselves disparaged in e-mail notes.
Strano's complaint repeats the accusations brought previously by Spitzer and others.
The lawsuit notes that "several of the companies purchased for the fund, including Exodus Communications and Inktomi, are companies covered by Merrill Lynch research analysts which did not reflect the analysts' true opinions."
But Merrill Lynch spokesman Mark Herr said the Strano lawsuit is "nonsense."
"The suit is baseless and without merit," he said. "To allege that people were not told about the risks is untrue."
He also said Strano's allegations about conflicts meaning that Merrill hid views or information from investors to protect relationships with the companies -- are false.
But Strano's attorney, Darren Blum, said Merrill Lynch harmed his client.
"Merrill Lynch is going to have to explain how one of the largest brokerages in the world, with its top 20 picks and its research, lost 90 percent of the investors' money within 30 months," said Blum.
He said Strano lost 90 percent of his $120,000 retirement nest egg.