A customer of Merrill Lynch and its parent, Bank of America, has sued the company over what she termed the "paltry" yields in her sweep and checking accounts held at the firm.
As reported by Barron's, the suit accuses the firm of failing to make adequate disclosures, securing the client's "prior written affirmative consent" for the company's use of her cash, and failing to disclose the rate terms adequately.
According to the complaint, Sarah Valelly, opened three Merrill Edge accounts and a Bank of America checking account with about $1 million in total. She earned 0.14% on cash in the Edge accounts and 0.06% in the checking account, according to the complaint, both of which are well below the roughly 2% she could have earned in a money-market fund.
[Recommended video: Is it time to sell your RIA? One industry expert says yes]
"Merrill Lynch disputes the allegations in the complaint and intends to vigorously defend the case," a spokesman for Merrill Lynch said in an email to Barron's.