Merrill Lynch $39 Million Merrill Edge Retirement Account Settlement, Who Qualifies and How Payments Work

If you had a Merrill Edge self-directed retirement account with cash swept into the Retirement Asset Savings Program (RASP) at any time between December 15, 2016 and March 15, 2020, you are probably a class member. You do not need to file a claim form. Payment is automatic if your share is at least $10. The court granted preliminary approval on October 7, 2026, and the final approval hearing is set for March 12, 2027. No payments go out until the court approves the settlement.

Official settlement website: MLRetirementAccountLitigation.com | Electronic payment request (former account holders): Official payment portal

The case is Valelly v. Merrill Lynch, Pierce, Fenner & Smith Incorporated, No. 1:19-cv-07998-VEC, in the U.S. District Court for the Southern District of New York. Merrill denies wrongdoing, and the settlement is not an admission of liability. It is not a payment for a data breach, investment fraud, or market losses. It concerns interest customers allegedly missed on uninvested cash.

Valelly v. Merrill Lynch Settlement: Quick Facts

Detail	Information
Case name	Valelly v. Merrill Lynch, Pierce, Fenner & Smith Incorporated
Case number	1:19-cv-07998-VEC
Court	U.S. District Court, Southern District of New York
Judge	Hon. Valerie E. Caproni
Defendant	Merrill Lynch, Pierce, Fenner & Smith Incorporated
Settlement amount	$39,000,000
Who is covered	People with Merrill Edge self-directed retirement accounts whose cash was swept into RASP between December 15, 2016 and March 15, 2020
Claim form	Not required
Minimum payment	$10 (smaller shares are not paid)
Opt-out deadline	Postmarked by February 19, 2027
Objection deadline	Received by February 19, 2027
Final approval hearing	March 12, 2027, 10:00 a.m., Courtroom 20C, 500 Pearl Street, New York
Electronic payment election deadline (former account holders)	March 26, 2027
Status	Preliminary approval granted October 7, 2026; final approval pending
Official settlement website	MLRetirementAccountLitigation.com
Electronic payment portal	secure.mlretirementaccountlitigation.com
Settlement administrator	JND Legal Administration
Phone	1-833-207-0938
Email	[email protected]

What the Merrill Edge Retirement Account Lawsuit Is About

The lawsuit concerns a cash sweep program. When investors leave money uninvested in a brokerage account, the firm may automatically move it into deposit accounts at affiliated banks. That is convenient, but the interest rate on those deposits can differ from rates available elsewhere.

Merrill Edge is Merrill’s self-directed investing platform. Uninvested cash in self-directed retirement accounts was swept into deposit accounts at Merrill-affiliated banks through RASP.

Plaintiff Sarah Valelly alleges Merrill breached its Merrill Edge Self-Directed Investing Client Relationship Agreement by paying less than “a reasonable rate” of interest on that cash. According to the court’s class certification opinion, the agreement said interest would be set at the discretion of a Merrill-affiliated bank based on economic and business conditions, and that retirement account assets would earn no less than a reasonable rate. Valelly opened her accounts, including a Roth IRA and a traditional IRA, in August 2017.

The central claim is a breach of contract claim. This is not a securities fraud case, and the court record does not make it an ERISA case.

Why it matters: a small rate gap adds up over time. As a simplified illustration only, $50,000 earning 0.10% for a year produces about $50 in interest, while 2% would produce about $1,000. That is not a calculation of Merrill’s liability or of anyone’s payment.

Merrill denies all claims. The court has not made a final ruling on liability, and class certification is a procedural step, not a finding that Merrill broke the law.

Timeline of the Valelly Case

Date	Event
August 27, 2019	Valelly files the lawsuit
June 3, 2020	Court dismisses the original complaint and allows an amendment
February 5, 2021	Amended complaint filed
July 2025	Court denies summary judgment on the “reasonable rate of interest” claim and grants it on a separate claim about asset tiers
December 4 and 31, 2025	Mediation sessions with mediator David M. Murphy
February 26, 2026	Court certifies the class and appoints Wolf Popper LLP as Class Counsel
Early September 2026	Parties reach an agreement to settle; a binding term sheet is reported to the court
September 8, 2026	Court cancels the October trial and requires a settlement approval motion
September 30, 2026	Settlement stipulation filed
October 7, 2026	Court grants preliminary approval
December 4, 2026	Deadline for the administrator to send notice
February 19, 2027	Opt-out and objection deadline
March 12, 2027	Final approval hearing
March 26, 2027	Electronic payment election deadline for former account holders

Trial had been scheduled for October 13, 2026, so the deal came about six weeks before it.

Who Qualifies for the Merrill Edge Settlement?

The court-certified class includes everyone who had one or more Merrill Edge self-directed retirement accounts with cash swept under RASP at any time from December 15, 2016 through March 15, 2020. The class is tied to roughly 1.1 million individual account IDs, and as of September 25, 2026, 69 people had asked to be excluded.

You do not need an open account today. Former account holders may qualify if their accounts and cash balances meet the settlement’s terms. Qualifying accounts are Merrill Edge retirement accounts such as traditional, Roth, and rollover IRAs. Confirm other IRA types, such as inherited, SEP, or SIMPLE IRAs, with the administrator.

Who is not included?

• People who held only a Merrill Edge non-retirement (taxable) brokerage account
• Retirement accounts not held through Merrill Edge Self-Directed Investing
• Accounts with no cash swept through RASP during the class period
• Activity entirely outside December 15, 2016 to March 15, 2020

Being a Merrill customer is not enough. The account must be a qualifying retirement account with RASP cash during the class period. Anyone who previously opted out of the class does not need to do anything further.

How to check your eligibility

1. Identify the account type: was it a Merrill Edge self-directed retirement account?
2. Check whether you held it at any time between December 15, 2016 and March 15, 2020.
3. Review old statements for cash balances in RASP.
4. Read the notice and FAQ on the official website.
5. If unsure, call 1-833-207-0938 or email the administrator.

How Much Will Merrill Edge Class Members Get?

The $39 million is a common fund, not a per-person amount. The Net Settlement Fund is what remains after:

• Notice and administration costs
• Court-awarded attorneys’ fees and litigation expenses
• Any service award to the plaintiff
• Taxes and other court-approved fees

Each class member gets a pro rata share, based on the interest the plan of allocation estimates they would have earned if RASP had paid a reasonable rate. Neither the parties nor the administrator can estimate your individual payment yet, because final fees and costs will not be known until the settlement hearing. Do not assume you will receive any specific amount.

How your share is calculated

For every month you held a qualifying account:

1. Take the cash balance in RASP on the last Friday of the month.
2. Multiply it by the gap between a “reasonable” annual interest rate (as estimated by the plaintiff’s expert) and the rate Merrill actually paid.
3. Adjust for the number of days in the month.
4. Add up all months to get your “Individual Recognized Claim.”

Your share equals your Individual Recognized Claim divided by the total of all class members’ claims. The rates depend on your tier, set by Merrill based on month-end assets under management:

Tier	Assets under management
Tier one	Up to $250,000
Tier two	$250,000 to $1,000,000
Tier three	$1,000,000 to $10,000,000
Tier four	$10,000,000 and above

For scale, the notice’s illustrative chart assumes a $10,000 cash balance on the last Friday of every month. Under those assumptions, monthly figures ran from $0 up to a high of $6.46 (tier two, August 2019). The rate gap was widest in 2019. The chart is an example only, not an estimate of anyone’s payment.

The $10 minimum

If your share works out to less than $10, you will not receive a payment because of the cost of issuing it.

Do You Need to File a Claim?

No. The administrator uses account and contact records to determine eligibility and calculate payments. Do not pay anyone to “file” or “unlock” your payment, and never give your Merrill password, banking login, or one-time codes to anyone claiming to be a settlement representative. Use only the official website and portal listed above.

How and When Class Members Get Paid

Payment goes out automatically after the court grants final approval and the judgment becomes final.

• If you still have your Merrill Edge retirement account: Your payment is deposited directly into that account.
• If you no longer have the account: You are paid by check or electronic transfer. The notice strongly encourages electronic transfer, which you can choose on the settlement website by March 26, 2027. Without a timely election, payment is issued by check. You may need the unique ID from your notice to submit the request.

Money from uncashed checks or undeliverable payments will be redistributed to class members if that can be done cost-effectively. If not, it goes to a court-approved charity. This is not a claims-made settlement, so Merrill does not get any of the fund back unless the settlement is terminated.

There is no confirmed payment date. An appeal could delay payment. Keep your contact information current, and check the official website for updates.

Your Options in the Valelly v. Merrill Lynch Settlement

Option	What it means	Deadline
Do nothing	You get a payment if your share is at least $10, and you give up the right to sue Merrill over the settled claims	None
Opt out	No payment, but you keep the right to sue Merrill separately over the same claims	Postmarked by February 19, 2027
Object or comment	Tell the court what you think of the settlement, fee request, or service award	Received by February 19, 2027
Attend the hearing	Optional	March 12, 2027, 10:00 a.m.

What if you do nothing? You generally do not have to act to get paid. But if the court grants final approval, you are bound by the settlement and its release even if your share falls below $10. Our guide on what happens if you do nothing in a class action settlement explains the difference between doing nothing and opting out.

How to opt out

Mail a signed letter saying you want to be “excluded from the Class in Valelly v. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Case No. 1:19-cv-07998-VEC.” Include your full name, mailing address, email address, and telephone number. Requests on behalf of more than one class member are invalid. Mail it to Valelly v. Merrill Lynch, c/o JND Legal Administration, PO Box 91219, Seattle, WA 98111, postmarked by February 19, 2027.

Opting out can affect your legal rights. If you think your individual losses are significant, consider speaking with a qualified attorney.

How to object

You can object only if you stay in the class. File a written objection with the Clerk of the Court, U.S. District Court, Southern District of New York, 500 Pearl Street, New York, NY 10007, and deliver copies to Class Counsel and Merrill’s counsel, all received by February 19, 2027. Include the case name and number, your contact information, whether the objection applies only to you or to a larger group, your RASP cash balances and interest paid during the class period with supporting documents, the grounds for your objection, and whether you plan to appear.

An objection is not an opt-out. If you object and the court approves the settlement anyway, you are still eligible for a payment.

What You Give Up by Staying in the Class

Unless you opt out, you release Merrill and related parties, including Bank of America, N.A., BofA Securities, Inc., and Bank of America Corporation, from claims about the interest paid on RASP during the class period. That includes claims you do not know about yet, and a related claim about how customers were assigned to asset tiers.

The release does not cover claims in a separate case, In re Merrill Lynch Cash Sweep Programs, No. 1:23-cv-10768 (S.D.N.Y.), except that self-directed retirement account claims for the class period in that case are released.

Attorneys’ Fees and Service Award

Wolf Popper LLP is Class Counsel and has handled the case on a contingency basis since 2019. The firm will ask the court for:

• Attorneys’ fees of no more than 30% of the fund, or $11,700,000
• Reimbursement of litigation expenses of up to $2.1 million
• A service award for Sarah Valelly of up to $15,000
• Interest on those amounts at the same rate the fund earns

The notice says Class Counsel has a fee-sharing agreement to pay 15% of any net fees awarded to Richard J. Vita of Vita Law Offices P.C. The court decides the final amounts, and everything awarded comes out of the settlement fund, not from class members separately. The fee request will be filed at least 35 days before the hearing and posted on the settlement website. An unapproved request is not an amount already awarded.

When Will the Court Decide?

Judge Caproni will hold the final approval hearing on March 12, 2027, at 10:00 a.m. in Courtroom 20C, 500 Pearl Street, New York. The date and time can change, so check the website. She will consider whether to approve the settlement as fair, reasonable, and adequate, the allocation plan, fees and expenses, and any objections. Class members do not have to attend.

Merrill can terminate the settlement if the number of opt-outs exceeds a confidential threshold. If the settlement ends, the case returns to where it stood before the deal and the money goes back to Merrill.

How This Case Differs From Other Merrill Cash Sweep Lawsuits

The Valelly settlement covers a defined class of Merrill Edge retirement account holders and a class period ending March 15, 2020. It is separate from other litigation over Merrill’s cash sweep practices, including a second proposed class action reported in September 2026 and In re Merrill Lynch Cash Sweep Programs. Those cases have their own claims, periods, and deadlines. If you only had a taxable brokerage account, or held cash after March 15, 2020, do not assume this settlement covers you. For the wider picture, see our coverage of Merrill Lynch cash sweep class action lawsuits and bank cash sweep program lawsuits. To understand how payments like these are split, read how pro rata class action settlement payments are calculated.

Frequently Asked Questions

Who qualifies for the Merrill Lynch $39 million settlement?

People who held qualifying Merrill Edge self-directed retirement accounts with cash swept through RASP between December 15, 2016 and March 15, 2020.

Do I need to file a claim?

No. Eligible class members are paid automatically.

How much will I receive?

It depends on the allocation formula, your qualifying cash balances, your tier, and the net fund after court-approved deductions. Payments under $10 are not issued.

Can former Merrill Edge customers get paid?

Yes. Closing your account does not disqualify you. You can receive a check or request an electronic transfer by March 26, 2027.

What is the deadline to opt out or object?

February 19, 2027. Opt-outs must be postmarked by that date, and objections must be received by that date.

When is the final approval hearing?

March 12, 2027, at 10:00 a.m. Eastern in the Southern District of New York.

Did Merrill admit it broke the law?

No. The settlement resolves disputed claims without a trial verdict on liability.

Does it cover regular brokerage accounts or cash held after March 15, 2020?

No. It covers qualifying retirement accounts during the class period only.

When will payments be sent?

There is no guaranteed date. Payments follow final approval and the end of any appeals.

Is the settlement legitimate?

Yes. It has an official case website run by JND Legal Administration and a federal court order granting preliminary approval. There is no fee to receive payment.

Who should I contact with questions?

Call the administrator at 1-833-207-0938. The notice says not to contact the court or Merrill. Class Counsel’s office may not know whether you are a class member or how much you will get, so the administrator is the better first call.

Official Settlement Contacts

• Settlement website: MLRetirementAccountLitigation.com (notice, settlement stipulation, key dates, FAQs, electronic payment form)
• Phone: 1-833-207-0938
• Email: [email protected]
• Mail: Valelly v. Merrill Lynch, c/o JND Legal Administration, PO Box 91219, Seattle, WA 98111
• Class Counsel: Wolf Popper LLP, 570 Lexington Avenue, 19th Floor, New York, NY 10022, (212) 759-4600

Sources

1. Official settlement website: https://www.mlretirementaccountlitigation.com/
2. Long-Form Notice, Valelly v. Merrill Lynch, Pierce, Fenner & Smith Incorporated, No. 1:19-cv-07998-VEC (S.D.N.Y.): https://assets-us-01.kc-usercontent.com/1eeb16db-4934-006e-40a6-38fa91285ebb/122aab31-6318-4df7-9791-cdbcb66d746c/Valelly%20-%20Long-Form%20Notice.pdf
3. Stipulation of Settlement, filed September 30, 2026 (ECF No. 397): https://assets-us-01.kc-usercontent.com/1eeb16db-4934-006e-40a6-38fa91285ebb/88ef75f2-ddf9-4c8d-92b7-4e286b1480f4/Valelly%20-%20Stipulation%20of%20Settlement.pdf
4. Official settlement FAQs: https://www.mlretirementaccountlitigation.com/faq
5. Preliminary Approval Order, October 7, 2026: https://law.justia.com/cases/federal/district-courts/new-york/nysdce/1%3A2019cv07998/521786/401/
6. Class Certification Opinion and Order, February 26, 2026: https://law.justia.com/cases/federal/district-courts/new-york/nysdce/1%3A2019cv07998/521786/325/
7. Reuters, “Bank of America’s Merrill Lynch settles cash sweep case for $39 million, must face second lawsuit,” September 30, 2026: https://www.reuters.com/business/finance/bank-america-pay-39-million-settle-customer-claims-over-low-interest-rates-cash-2026-09-30/
8. Wolf Popper LLP, case information: https://www.wolfpopper.com/cases-investigations/merrill-lynch

Disclaimer: This article summarizes the official settlement documents and court orders as of October 27, 2026. It is general legal information, not legal or tax advice, and does not create an attorney-client relationship. Deadlines and the hearing date can change, so check the official website before you act. AllAboutLawyer.com is an informational website, not a law firm. We will update this article if the court reschedules the hearing or rules on final approval.