Merrill Edge retirement account holders whose uninvested cash was swept between December 15, 2016 and March 15, 2020 are covered by the $39 million Merrill Lynch cash sweep class action settlement, filed in Manhattan federal court on September 30, 2026. The court has not yet granted preliminary approval, and how class members will be paid has not been announced.
Current Status
The settlement is awaiting preliminary approval. Class counsel filed an unopposed motion on September 30, 2026 asking U.S. District Judge Valerie E. Caproni to approve it, and as of October 3, 2026 the court had not ruled or set a hearing. No official settlement website, claim process or deadline has been published, and no payments have been made.Free settlement alerts
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What Changed Recently?
Merrill Lynch, Pierce, Fenner & Smith Inc. agreed to pay $39 million to settle Valelly v. Merrill Lynch, Pierce, Fenner & Smith Inc., No. 1:19-cv-07998, in the U.S. District Court for the Southern District of New York. On September 8, 2026, Judge Caproni cancelled the jury trial that had been set to begin October 13, 2026 and ordered the parties to file for preliminary approval. The settlement stipulation, dated September 30, 2026, and the motion for preliminary approval were filed that day.The lawsuit, filed August 27, 2019, alleged that Merrill breached its agreements with Merrill Edge retirement account customers, which promised that interest on retirement account cash would be “no less than a reasonable rate,” by sweeping that cash into Bank of America deposit accounts paying far less than market rates. News reports put Merrill’s sweep rates at 0.05% to 0.14%, compared with about 2% at other brokerages. Merrill denied wrongdoing. The court dismissed the original complaint in 2020 but allowed an amended breach of contract claim to proceed in 2021, later certified a class, and in July 2026 split the planned trial into separate liability and damages phases before the case settled.
Who Qualifies?
The settlement covers the class the court previously certified, which the motion calls the “Certified Class.” News reports describe it as Merrill Edge self-directed retirement account holders whose uninvested cash was swept into Merrill’s Retirement Asset Savings Program between December 15, 2016 and March 15, 2020. The exact class definition, including any exclusions, is in the settlement stipulation, which is available only through the federal court’s paid PACER system; OCA will update this page with the official definition once the class notice is published.Merrill customers whose accounts were swept after the class period are not covered. Sweep rates from 2022 onward are the subject of a separate, ongoing case, the Merrill Lynch cash sweep lawsuit before Judge Margaret Garnett, which has not settled.
How Much Can You Get?
The total settlement is $39 million. How that amount will be divided among class members, and how much will go to attorneys’ fees, expenses and administration costs, is set out in the settlement stipulation, which has not been made publicly available for free. No per-person estimate has been published.What Proof or Notice ID Is Required?
Not announced yet. The motion asks the court to approve a long-form notice, a postcard notice, an email notice and a summary notice. Those notices will explain whether class members are paid automatically or must file a claim.What Is the Deadline?
No settlement deadlines have been set. The motion asks the court to set a schedule for objections, to give people in the certified class an additional opportunity to opt out of the settlement, and to schedule a final approval hearing.Earlier notice that some class members received was about the class certification, not the settlement. The court extended the deadline for some of those class members to request exclusion from the class to September 15, 2026.
How Do You Take Action?
There is nothing to file yet. Once the court approves the notice plan, the proposed administrator, JND Legal Administration, is expected to send notice by postcard and email and publish settlement information. OCA could not locate an official settlement website as of October 3, 2026 and will add the link here when one is published.What Happens Next?
Judge Caproni will decide whether to grant preliminary approval, approve the notice forms and appoint JND as administrator, and set dates for opt-outs, objections and a final approval hearing. Payments would follow only after final approval.Sources and Verification
- Valelly v. Merrill Lynch, Pierce, Fenner & Smith Inc., No. 1:19-cv-07998 (S.D.N.Y.) — CourtListener docket, including the September 8, 2026 order cancelling trial (ECF 393) and the settlement stipulation (ECF 397)
- Notice of Unopposed Motion for Preliminary Approval of Class Action Settlement (ECF 398, September 30, 2026)
- InvestmentNews, “Merrill to pay $39 million in cash sweep settlement”
- Bloomberg Law, “Merrill Lynch Settles Cash Sweep Class Action for $39 Million”
OpenClassActions.com is a consumer news site and is not the settlement administrator or a law firm.
Questions
Who is covered by the $39 million Merrill Lynch cash sweep settlement?
The settlement is for the class the court already certified in Valelly v. Merrill Lynch, which news reports describe as Merrill Edge retirement account holders whose uninvested cash was swept between December 15, 2016 and March 15, 2020. The exact definition is in the settlement stipulation filed September 30, 2026, which is not yet publicly available for free.
Do I need to file a claim in the Merrill Lynch cash sweep settlement?
That has not been announced. The court has not yet granted preliminary approval, and the notice explaining whether payments will be automatic or require a claim form has not been released. The proposed administrator, JND Legal Administration, would send postcard and email notice once the court approves the plan.
I already got a notice about the Merrill class action. What was that?
Before the settlement, the court certified the class and JND sent notice of the class action itself, with a deadline for some class members to request exclusion extended to September 15, 2026. That was notice of the lawsuit, not the settlement. The settlement motion asks the court to give class members an additional opportunity to opt out and a chance to object.
Does this settlement cover Merrill accounts after 2020?
Not according to the reported class period, which ends March 15, 2020. Sweep rates from 2022 onward are the subject of a separate, ongoing case, In re Merrill Lynch Cash Sweep Programs, before Judge Margaret Garnett. That case has not settled.
Did Merrill Lynch admit wrongdoing?
No. Merrill Lynch denied wrongdoing, according to news reports of the settlement. The case settled before a jury trial that had been scheduled to begin October 13, 2026.
