NEW YORK--Following Harvard's legal lead, eight companies have filed suit in recent months against Merril Lynch for allegedly deceiving them about the quality of investments they purchased.
In November, Harvard sued the investment giant in Federal District Court in Boston, charging that Merrill Lynch misled the University when it acquired a $45 million interest in the Lomas Financial Corporation. A few months after the transaction, Lomas filed for bankruptcy.
In Massachusetts, Illinois, California, New York and Nevada, a total of eight suits brought by banks, trusts and other firms are now pending against Merrill Lynch because of its sale of Lomas investments, according to a court document.
The deluge of legal actions around the country led Merrill Lynch attorneys to ask a national judicial panel to move all of the cases to New York City. Harvard and several other plaintiffs objected, urging that the cases be allowed to proceed where they were originally filed.
At a hearing Friday in St. Paul, Minn., Harvard asked the Judicial Panel on Multidistrict Litigation to reject Merrill Lynch's bid to bunch the cases in New York City, Harvard attorney Richard Renehan said.
"We opposed the motion to transfer," Renehan said. He said he also suggested to the judicial panel that, "if there is to be transfer, it is to Boston."
Renehan said that he argued for many of the other plaintiffs in the various cases around the country. He declined to predict when the panel might rule on the motion to transfer the cases. A court clerk said such a decision "could come at any time."
Andrew Wertheim, a New York attorney who spoke at the hearing on behalf of Merrill Lynch, could not be reached yesterday for comment.
The fact that Renehan was the sole lawyer to argue among the nine plaintiffs, coupled with the proposition that all the cases be transferred to Boston, may indicate that the University is poised to play the lead- ing role in the litigation.
Renehan declined to discuss whether Harvard wascontemplating such a role or whether otherplaintiffs are looking to Harvard for guidance inthe case.
If Harvard does become the captain, of sorts,of the legal team attacking Merrill Lynch, it willnot be the first time the University has putitself in such a position.
According to sources at various universities,Harvard has also taken the lead in responding tothe current Justice Department investigation ofalleged tuition-fixing at colleges. Harvard VicePresident and General Counsel Daniel Steiner '54reportedly wrote the majority of a legal brief thecolleges filed with the Federal authorities