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News > International
Merrill settles copper suit
June 30, 1999: 12:48 p.m. ET

Merrill Lynch to pay $25M to settle allegations over Sumitomo scandal
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NEW YORK (CNNfn) - Merrill Lynch & Co. agreed Wednesday to pay $25 million to the U.S. Commodity Futures Trading Commission and the London Metal Exchange to settle allegations of involvement in Sumitomo Corp.'s efforts to fix copper prices more than three years ago.
     Merrill Lynch (MER) did not admit or deny any wrongdoing, but paid $15 million to the CFTC and 6.5 million pounds ($10 million) to the LME.
     The company was accused of providing large amounts of credit to Global Minerals and Metals Corp. and Japan's Sumitomo to corner copper prices on the LME and then benefiting from trades carried out using knowledge of their activities.
     When the CFTC filed suit in May, Merrill said the allegations were "without merit" and said the company would defend itself against the suit.
     But Merrill reversed course and "entered into the settlements to bring closure to these regulatory proceedings and to avoid the expense and distraction of protracted litigation," the company said in a statement Wednesday.
     In 1995, Sumitomo's top copper trader Yasuo Hamanaka was jailed for forgery related to a $2.6 billion loss by the firm. Back to top

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