Dow Corning Sues Merrill Lynch Over Auction Rate Securities Losses
Dow Corning Corp. has filed another ARS lawsuit - this one against Merrill Lynch over a $166 million loss in auction rate securities. The lawsuit, filed Nov. 20, alleges that Merrill Lynch misled the silicone supplier about the safety and liquidity of the instruments and the ARS market, which collapsed in February 2008.
This is the second lawsuit that Dow Corning has filed over losses in auction rate securities. The first complaint was filed Nov. 7 against BB&T Corp. and alleged that the North Carolina bank falsely represented the safety and liquidity of $667 million in auction rate securities that Dow previously purchased. According to the complaint, Dow bought the ARS bonds from 2005 to February 2008 after BB&T touted the investments as a “highly liquid, highly rated and secure investments that were equivalent to cash.”
The latest lawsuit involving Merrill Lynch is Dow Corning Corporation et al v Merrill Lynch & Co, U.S. District Court for the Southern District of New York, No. 09-9697.
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