Merrill Lynch’s $39 million settlement with holders of Merrill Edge retirement accounts won preliminary approval from a federal judge on October 7, 2026. The deal resolves a lawsuit over the low interest paid on uninvested cash in those accounts from December 2016 to March 2020. A final approval hearing is set for March 12, 2027, and no money is paid out before then.
The case website run by JND Legal Administration, the settlement administrator, says the court granted preliminary approval on October 7 and that notice will go to class members by December 4, 2026. Merrill has denied wrongdoing, according to news reports.
Who counts as a class member
The class covers anyone who had one or more Merrill Edge retirement accounts with cash swept through the Retirement Asset Savings Program at any time between December 15, 2016, and March 15, 2020, according to the settlement listing. That includes people who have since closed the account or moved it to another firm. Anyone who holds a Merrill account now but opened it after March 2020 is outside this deal.
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Merrill’s sweep program moved idle cash in retirement accounts into deposit accounts at Merrill-affiliated banks. Plaintiff Sarah Valelly alleged those accounts paid annual yields of 0.05% to 0.14%, according to Top Class Actions. InvestmentNews reported that other brokerages were paying about 2% on similar cash during the period. The lawsuit was filed in 2019 in federal court in Manhattan, and the parties reached an agreement on September 1, 2026, which avoided a trial that had been scheduled for October 13. The preliminary settlement was filed on September 30.
How the money is expected to reach account holders
The settlement listing says there is no claim form to file and that payments are automatic. Money would go into an existing Merrill Edge account, or to former account holders by check or electronic transfer. Payments under $10 would not be issued.
The same listing says each person’s share would be divided pro rata, based on the estimated interest lost, and that no per-person estimate has been published. Payments follow final approval and the resolution of any appeals, so the realistic timeline runs past the March hearing.
What comes out of the $39 million first
Class counsel plans to ask for attorneys’ fees of up to 30% of the fund, which is $11.7 million, plus up to $2.1 million in litigation costs and a service award of up to $15,000 for Valelly, Top Class Actions reported. Wolf Popper LLP represents the plaintiff. Notice and administration costs and taxes also come out before the rest is divided.
That means the amount left for class members will be well below the headline figure. The reduction does not change who is eligible, but it matters for anyone expecting a large check. Small balances over the years could produce a payment close to the $10 cutoff.
The dates between now and the hearing
- December 4, 2026: the deadline for email or postcard notice to class members.
- February 5, 2027: class counsel’s fee motion and settlement papers are due.
- February 19, 2027: the last day to opt out or object, per the settlement listing.
- March 12, 2027: the final approval hearing before Judge Valerie Caproni in Manhattan.
The administrator’s site warns that deadlines can change and tells visitors to check it regularly. Anyone who opts out keeps the right to sue Merrill separately but gives up a share of this fund. Staying in requires no action.
The administrator’s site also posts the settlement agreement and the court’s order on its Important Documents page. Questions can go to JND Legal Administration at 1-833-207-0938, by email at info@MLRetirementAccountLitigation.com, or by mail to Valelly v Merrill Lynch, c/o JND Legal Administration, PO Box 91219, Seattle, WA 98111. Scammers often imitate settlement notices, so contact details are best taken from the court-approved case website rather than from a call or text.
A separate Merrill case covers later years
Sweep rates from 2022 onward are not part of this deal. They are the subject of a different lawsuit before Judge Margaret Garnett, and on September 30 she granted in part and denied in part Merrill’s motion to dismiss. No class has been certified in that case and there is nothing for customers to file.
InvestmentNews also noted that the SEC imposed a $25 million penalty on Merrill Lynch in January 2025 over cash sweep practices. The settlement before Judge Caproni is a private class action and is separate from that penalty.
The open question for account holders is practical. A notice may arrive by email or postcard before December 4, and it may look like junk mail. Anyone who held a Merrill Edge retirement account in those years should keep the notice, note the February 19 and March 12 dates, and make sure Merrill has a current address on file.
Held a Merrill Edge retirement account in 2016 to 2020?
An automatic payment still depends on a current address. A notice that lands in a junk folder, or a postcard sent to an old home, can leave a share of the $39 million sitting unpaid for months, and a check that goes uncashed can expire.
The Settlement & Refund Recovery System teaches the four-date rule for reading a settlement notice, so the opt-out, objection and hearing dates are not mixed up. It also includes a claim log and payment tracker for recording when a notice arrived and when money is due.
Get the notice-reading rule and payment tracker for the Merrill settlement →
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
