US banks face internet lawsuit threat from disgruntled investors

NEWS

NEW YORK -- US investment banks could face a host of compensation claims from unhappy investors nursing big losses after backing internet companies following the settlement of an arbitration against Merrill Lynch in July, according to banking industry analysts.

The suit arose from Merrill's alleged failure to disclose a conflict of interest. Merrill settled the case without admitting wrongdoing, but banking industry analysts reckoned the investment bank paid $400,000 to its aggrieved client.

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