Brokerage · Pending — Automatic Payment

Merrill Lynch $39M Cash Sweep Settlement for Merrill Edge Retirement Accounts — Automatic Payments

Published October 3, 2026
Updated October 9, 2026

Merrill Edge retirement account holders whose cash was swept between December 15, 2016 and March 15, 2020 will be paid automatically from the $39 million Merrill Lynch cash sweep class action settlement; there is no claim form to file. The court granted preliminary approval on October 7, 2026 and set the final approval hearing for March 12, 2027.

Bank of America branch — Merrill Lynch cash sweep class action settlement

Current Status

U.S. District Judge Valerie E. Caproni granted preliminary approval on October 7, 2026. There is no claim form: class members will be paid automatically, into their Merrill Edge retirement account if it is still open, or by check or electronic transfer if it is not. Notice is due to go out by email or postcard by December 4, 2026. The deadline to opt out or object is February 19, 2027, and the final approval hearing is March 12, 2027. No payments have been made yet; they come only after final approval.

Status Preliminarily Approved October 7, 2026 · final approval hearing March 12, 2027
Claim Deadline None — automatic payment Opt-out and objection deadline: February 19, 2027
Settlement Value $39 million Pro rata, based on estimated lost interest · payments under $10 not issued
Proof Required No Paid from Merrill’s records · no claim form

What Changed Recently?

On October 7, 2026, Judge Caproni signed an order granting preliminary approval, finding that she will likely be able to approve the settlement as fair, reasonable and adequate. The order appoints JND Legal Administration as administrator, approves the email, postcard, summary and long-form notices, gives class members another chance to opt out, and sets the final approval hearing for March 12, 2027 at 10:00 a.m. in Manhattan.

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 certified earlier in the case. According to the October 7, 2026 order, it consists of all persons who had one or more Merrill Edge retirement accounts with cash balances that were swept through the Retirement Asset Savings Program at any time from December 15, 2016 through March 15, 2020. People who already excluded themselves from the class after the earlier class notice remain excluded and do not need to do anything.

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. After notice and administration costs, court-awarded attorneys’ fees and expenses, a service award for the class representative and taxes are paid, the remaining net fund is divided pro rata. Each class member’s share is based on the approximate interest they would have earned if, as the plaintiff alleged, the sweep program had paid a reasonable rate. Class counsel will ask for attorneys’ fees of up to 30% of the fund. Payments under $10 will not be issued. No per-person estimate has been published.

What Proof or Notice ID Is Required?

None. The court-approved notice says class members do not need to file a claim to receive a payment. Merrill is giving the administrator current email and mailing addresses, and payments are calculated from account records. Class members who no longer have a Merrill Edge retirement account are encouraged to choose payment by electronic transfer on the official settlement website; otherwise they will be sent a check.

What Is the Deadline?

There is no claim deadline. The dates set by the October 7, 2026 order are:


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?

Class members who still have a Merrill Edge retirement account do not need to do anything to be paid. Former account holders can choose electronic transfer on the official Merrill retirement account settlement website, which the court-approved notice names as the settlement website. Instructions for opting out or objecting are in the long-form notice posted there.

What Happens Next?

Notice goes out by December 4, 2026. Class counsel’s fee request and the papers supporting the settlement are due February 5, 2027, and objections are due February 19, 2027. Judge Caproni will decide whether to grant final approval at the March 12, 2027 hearing. Payments come only after final approval and after any appeals are resolved.

Sources and Verification


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?

Everyone who had one or more Merrill Edge retirement accounts with cash balances swept through Merrill’s Retirement Asset Savings Program at any time from December 15, 2016 through March 15, 2020, according to the court’s October 7, 2026 preliminary approval order. This is the class the court certified earlier in Valelly v. Merrill Lynch.

Do I need to file a claim in the Merrill Lynch cash sweep settlement?

No. The court-approved notice says there is no need to file a claim. Payments go directly into existing Merrill Edge retirement accounts, or by check or electronic transfer for class members who no longer have the account. Former account holders can choose electronic transfer on the official settlement website. Shares under $10 are not paid.

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 court’s October 7, 2026 order gives class members a second chance to opt out, and notice of the settlement is due to go out by December 4, 2026.

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.

For more class actions keep scrolling below.
Settlement Amount $39 million
Case Title Valelly v. Merrill Lynch, Pierce, Fenner & Smith Inc.
Case Number 1:19-cv-07998-VEC
Court U.S. District Court, Southern District of New York
Final Approval Hearing March 12, 2027 at 10:00 AM Judge Valerie E. Caproni · Manhattan federal courthouse
Administrator JND Legal Administration

More Cash Sweep and Brokerage Cases