Merrill faces suit over CMGI reports

Merrill Lynch is facing a class action lawsuit by a group of investors alleging that the brokerage house violated federal securities laws by issuing false and misleading analyst reports about Internet incubator CMGI. The law firm representing the investors, Finkelstein, Thompson & Loughran, has already filed suit on behalf of investors against Merrill Lynch and its former Internet analyst, Henry Blodget, on behalf of investors in iVillage, eToys, Lycos, Aether Systems, OpenWave Systems and 24/7 Real Media.

The suits come after the brokerage house's $100 million settlement with the New York Attorney General's office. Merrill Lynch agreed to pay the settlement and to revamp its research department to resolve charges that it promoted stocks its analysts were privately disparaging.