Merrill Lynch $39 Million Cash Sweep Settlement, Who May Qualify and Why There Is No Claim Deadline Yet

Merrill Lynch has agreed to a proposed $39 million settlement of a federal class action over the interest paid on uninvested cash in certain Merrill Edge retirement accounts. But there is no claim form or payment deadline yet: the settlement still needs court approval.

The case is Sarah Valelly v. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Case No. 1:19-cv-07998-VEC, in the U.S. District Court for the Southern District of New York. Judge Valerie E. Caproni certified the class in February 2026. In September, the parties told the court they had reached a binding settlement term sheet, and the judge canceled the October 13 trial and ordered the parties to seek preliminary approval.

The class covers people who had Merrill Edge retirement accounts with cash swept through Merrill’s Retirement Asset Savings Program (RASP) between December 15, 2016, and March 15, 2020.

Quick Facts: Merrill Lynch $39 Million Cash Sweep Settlement

Settlement Detail	Current Information
Defendant	Merrill Lynch, Pierce, Fenner & Smith Incorporated
Settlement amount	$39,000,000
Case	Sarah Valelly v. Merrill Lynch, Pierce, Fenner & Smith Incorporated
Case number	1:19-cv-07998-VEC
Court / judge	U.S. District Court for the Southern District of New York / Valerie E. Caproni
Class period	December 15, 2016 – March 15, 2020
Who may qualify	People with Merrill Edge retirement accounts whose cash was swept through RASP during the class period
Status	Proposed settlement; court approval still required
Claim form	Not available yet
Claim deadline	Not set
Administrator	JND Legal Administration (handled the class notice)
Trial	Canceled after the parties reported a settlement
Official case website	MLRetirementAccountLitigation.com

The $39 million figure comes from the settlement papers reported when the parties sought preliminary approval. The court’s September 8 order confirms the parties executed a binding term sheet and that the next step is court review under Federal Rule of Civil Procedure 23(e).

Merrill Lynch Retirement Account Customers Who May Qualify for the $39 Million Settlement

You may fall within the certified class if you:

• Had at least one Merrill Edge retirement account;
• Had cash in that account;
• Had that cash swept through RASP; and
• Had the qualifying account and sweep activity at some point from December 15, 2016, through March 15, 2020.

The class notice lists traditional IRAs, Roth IRAs, rollover IRAs, inherited IRAs, SEP IRAs and SIMPLE IRAs. A person with only a Merrill Edge non-retirement account is not in the certified class, and neither is an account that was not offered through Merrill Edge.

What the Merrill Lynch Cash Sweep Lawsuit Alleges

RASP automatically swept qualifying uninvested cash into deposit accounts at Merrill-affiliated banks. The plaintiff alleged Merrill’s customer agreement required it to pay at least a “reasonable rate” of interest on retirement-account assets, but the rates paid on swept cash were too low. The dispute was not whether customers earned some interest, but whether the rate met Merrill’s contractual obligation.

A 2024 federal court opinion noted that the plaintiff’s expert estimated approximately $68.6 million in damages for the December 2016 through March 2020 period under his methodology, and that Merrill offered competing expert analysis.

Merrill denied the allegations, and the class notice states it maintained it was not liable. The $39 million settlement resolves the dispute without a jury deciding whether Merrill breached its obligations.

Is the Merrill Lynch $39 Million Settlement Final?

No. On September 6, 2026, the parties told Judge Caproni they had executed a binding term sheet. On September 8, she canceled the October 13 trial and required a motion for preliminary approval. The settlement still has to go through the federal class action approval process, and a settlement announcement does not mean money can be distributed yet.

Does the Merrill Lynch $39 Million Settlement Have a Claim Form or Deadline?

There is currently no verified claim form and no verified claim deadline. The official litigation website still reflects the earlier class notice and the past opt-out process, not a settlement claims process.

Do not submit personal information to an unofficial website claiming to process a “$39 million Merrill Lynch claim” unless the court-approved settlement notice identifies that site.

What Merrill Edge Class Members Should Do Now

If you believe you are in the class, you generally do not need to file a claim right now. The earlier notice said class members did not need to act at that stage and should keep their contact information current. Practical steps:

1. Check whether your account fits the class definition (retirement account, RASP-swept cash, December 15, 2016 – March 15, 2020).
2. Keep your mailing and email addresses current with the administrator if needed.
3. Gather old statements showing your Merrill Edge retirement account and cash balances for that period, in case a claims process later asks for them. Keep them private and do not send them to anyone until an official notice requests them.
4. Monitor the official litigation website for settlement approval notices.
5. Wait for the court-approved settlement notice before assuming a claim form or deadline exists.

Merrill Lynch Settlement: The Opt-Out Deadline Has Already Passed

The court-approved notice gave class members until July 22, 2026 to request exclusion. Anyone who stayed in the class is bound by future judgments or settlements, subject to the court’s orders. That was an exclusion deadline, not a deadline to file a claim for the $39 million.

Class members who stayed in generally can still object to the settlement once the court-approved settlement notice sets the objection process. Until then, no objection deadline exists.

Will Every Merrill Lynch Class Member Get the Same Amount?

No. The $39 million is the total proposed amount, not an equal share per account. Distribution will depend on the terms the court approves, including any approved attorneys’ fees, litigation expenses, administration costs and the allocation formula. No individual payout amount has been established. Tax treatment of any payment, especially for IRA accounts, can be complicated, so consider asking a tax professional once a payment is on the table.

Merrill Lynch Cash Sweep Settlement Timeline

Event	Date
Lawsuit filed	August 27, 2019
Court certified the class	February 26, 2026
Class notice issued	April 2026
Opt-out deadline	July 22, 2026
Parties reported binding settlement term sheet	September 6, 2026
Court canceled October trial and ordered settlement-approval filing	September 8, 2026
Original trial date	October 13, 2026 (canceled)
Settlement claim deadline	Not set
Final approval date	Not yet set

Merrill Lynch $39 Million Class Action vs. the 2025 SEC Cash Sweep Case

In January 2025, the Securities and Exchange Commission announced a separate action over Merrill’s advisory-client cash sweep program. Merrill agreed to a $25 million civil penalty as part of a combined $60 million resolution with two Wells Fargo advisory firms.

That is not the same case as the $39 million Valelly class action, which involves Merrill Edge retirement accounts and RASP during December 15, 2016 – March 15, 2020. The SEC matter involved the advisory cash sweep program and compliance procedures in a later period.

FAQs: Merrill Lynch $39 Million Cash Sweep Settlement

Is the Merrill Lynch $39 million cash sweep settlement final?

No. The parties reached a binding term sheet, but the court must still review and approve it. Judge Valerie Caproni canceled the October 13, 2026 trial and directed the parties to seek preliminary approval.

Who is included in the Merrill Lynch cash sweep class?

People who had one or more Merrill Edge retirement accounts with cash swept through RASP at any time from December 15, 2016, through March 15, 2020.

Is there a Merrill Lynch $39 million settlement claim form?

Not yet. The official litigation website does not provide a settlement claim form.

What is the Merrill Lynch settlement claim deadline?

None has been set. July 22, 2026 was the deadline to opt out of the class, not to file a claim.

Can Merrill Edge non-retirement customers participate?

Not under the current certified class definition, which covers Merrill Edge retirement accounts only.

How much will each Merrill Lynch class member receive?

Not established yet. The $39 million is the total proposed amount, and individual payments depend on the court-approved terms and allocation formula.

Did Merrill Lynch admit wrongdoing?

No. The class notice states Merrill denied the allegations and maintained it was not liable.

Where can Merrill Lynch class members get official updates?

At MLRetirementAccountLitigation.com, which identifies JND Legal Administration as the administrator and lists contact information.

Is this the same as Merrill’s $25 million SEC settlement?

No. The SEC penalty concerned the advisory cash sweep program. The $39 million Valelly case concerns Merrill Edge retirement accounts and RASP in 2016-2020.

What Happens Next in the Merrill Lynch Cash Sweep Case?

The next step is court review of the proposed settlement. Until preliminary and final approval proceedings are complete, there is no verified claim deadline, payment date or individual payout to report. We will update this article if a claim form, deadline, allocation formula, fee request or final approval hearing is published.

Looking for the other Merrill Lynch settlement on our site? It covers employees and unpaid wages, not cash sweep accounts: Merrill Lynch $4.9M Settlement, Claim Deadline Passed When Do Checks Arrive?

Sources and Court Records for the Merrill Lynch Cash Sweep Settlement

1. Sarah Valelly v. Merrill Lynch, Pierce, Fenner & Smith Incorporated, No. 1:19-cv-07998-VEC (S.D.N.Y.).
2. February 26, 2026 class certification order.
3. September 8, 2026 order canceling the trial and directing the parties to seek preliminary settlement approval.
4. Court-authorized Notice of Pendency of Class Action and certified class definition.
5. Official litigation website, administered by JND Legal Administration.
6. SEC press release, January 17, 2025, Merrill Lynch cash sweep enforcement action.
7. AdvisorHub report, “Merrill Agrees to $39M Settlement in Cash Sweep Suit.”

This article is for informational purposes only and is not legal advice. Settlement terms, eligibility, deadlines and payment procedures can change with further court orders.

Researched and written by Israr Ahmad, legal content researcher and founder of AllAboutLawyer.com. All facts verified against the S.D.N.Y. court record in No. 1:19-cv-07998-VEC, the court-authorized class notice and litigation website run by JND Legal Administration (MLRetirementAccountLitigation.com), the SEC’s January 2025 press release and AdvisorHub’s report on the settlement, as of October 2, 2026. Last Updated: October 2, 2026.