8-K: Current report filing
Published on May 21, 2002
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 21, 2002
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Merrill Lynch & Co., Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 1-7182 13-2740599
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
4 World Financial Center, New York, New York 10080
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 449-1000
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(Former Name or Former Address, if Changed Since Last Report.)
Item 5. Other Events
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On May 21, 2002, Merrill Lynch announced an agreement with the New York State
Attorney General under which it will enact significant new policies to further
insulate securities research analysts from any real or perceived undue influence
from its investment banking division. The agreement resolves all aspects of the
Attorney General's inquiry pertaining to Merrill Lynch and all present and
former employees. The inquiry centered on Merrill Lynch's Internet sector
securities research from 1999 to 2001. The agreement specifically provides that
the fact of the settlement represents neither evidence nor admission by Merrill
Lynch of wrongdoing or liability.
The settlement provides for Merrill Lynch to make a civil payment of $48 million
to New York State, and an additional $52 million to settle all issues arising
out of this matter with all other states. Both of these payments are contingent
on acceptance of the agreement by all states.
Among the changes that Merrill Lynch will implement under the terms of the
agreement:
o A complete separation of the evaluation and determination of research
analyst compensation from the investment banking business, to be
achieved through a number of new policies. Research analysts will be
compensated for only those activities and services intended to benefit
Merrill Lynch's investor clients.
o Creation of a new Research Recommendations Committee (RRC) to review
all initiations of and changes to stock ratings for objectivity,
integrity and a rigorous analytical framework. The RRC will be
composed of representatives of private client and institutional sales
management, research management and research strategists, and headed
by an individual who will be paid primarily based on the performance
of research recommendations for investors.
o Appointment of a compliance monitor who, for a period of one year,
will ensure compliance with the agreement.
o A new system to monitor electronic communications between investment
bankers and equity research analysts.
As has been previously agreed with the Attorney General, Merrill Lynch will
include in its equity research reports (i) added disclosure on whether Merrill
Lynch has received, or is entitled to receive, compensation from the covered
company in connection with publicly announced equity underwritings and merger
and acquisition transactions over the prior 12 months and (ii) specific
disclosure on a percentage basis of the distribution of strong buy, buy, neutral
and reduce/sell recommendations for stocks in a number of different categories.
* * *
Certain statements contained in this report may constitute forward-looking
statements, including, for example, statements about management
expectations, strategic objectives, business prospects, anticipated expense
savings and financial results, anticipated results of litigation and
regulatory proceedings, and other similar matters. These forward-looking
statements are not statements of historical facts and represent only Merrill
Lynch's beliefs regarding future events, which are inherently uncertain.
There are a variety of factors, many of which are beyond Merrill Lynch's
control, which affect its operations, performance, business strategy and
results and could cause its actual results and experience to differ
materially from the expectations and objectives expressed in any
forward-looking statements. These factors include, but are not limited to,
actions and initiatives taken by both current and potential competitors, the
effect of current, pending and future legislation and regulation both in the
United States and throughout the world, and the other risks detailed in
Merrill Lynch's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q,
and Current Reports on Form 8-K. Accordingly, readers are cautioned not to
place undue reliance on forward-looking statements, which speak only as of
the date on which they are made. Merrill Lynch does not undertake to update
forward-looking statements to reflect the impact of circumstances or events
that arise after the date the forward-looking statement was made. The reader
should, however, consult any further disclosures of a forward-looking nature
Merrill Lynch may make in its reports on Form 10-K, Form 10-Q, and Form 8-K.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
MERRILL LYNCH & CO., INC.
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(Registrant)
By: /s/ Judith A. Witterschein
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Judith A. Witterschein
Corporate Secretary
Date: May 21, 2002