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MERRILL LYNCH TO REIMBURSE ELIGIBLE INVESTORS FOR A PRICING ERROR IN SECONDARY MARKET SALES OF UITs BETWEEN 1972-1987

 NEW YORK, April 22 /PRNewswire/ -- Merrill Lynch & Co., Inc. (NYSE: MER) today announced it has settled an administrative proceeding with the Securities and Exchange Commission under which it will reimburse, with interest, eligible investors for an inadvertent pricing error in secondary market sales of certain Unit Investment Trusts (UITs) which occurred between 1972 and 1987.
 The inadvertent error, which was corrected in 1987, involved the method used to calculate one component of accrued interest representing a very small part of the total unit value. As a result, Merrill Lynch underpaid secondary market sellers and similarly, undercharged secondary market buyers of the affected UITs.
 Of the more than 3,000 UITs sold by Merrill Lynch to date, secondary market sales of 570 UITs were affected. The amounts varied, but were as low as one cent per unit, and averaged about $3.84 per unit or less than one-half of one percent of unit value on average.
 UITs are trusts with a defined portfolio of pre-selected securities -- generally corporate or municipal bonds -- which is divided into units initially valued at approximately $1000 per unit.
 In December 1987, a special cash distribution was made to affected unitholders as of Sept. 25, 1987. Reimbursements under today's settlement will be made to eligible investors who sold UIT units in the secondary market prior to that date.
 The pricing method that caused the inadvertent error has not been in use since 1987 and never affected the initial offering of any UIT. No other investment products at Merrill Lynch were affected, and the company is confident its Unit Investment Trusts continue to provide an outstanding investment alternative for investors.
 Merrill Lynch will use available client records and other means to notify eligible investors. The company also will place advertisements in general circulation newspapers outlining reimbursement procedures. The reimbursement program is expected to be completed within 15 months.
 Merrill Lynch established reserves for this purpose prior to the first quarter of 1993, and is fully reserved for all contingencies.
 As part of the settlement, Merrill Lynch has retained the accounting firm of Price Waterhouse to review its current systems and procedures for the pricing of UIT secondary market transactions. While Merrill Lynch is confident that its current UIT pricing system is functioning properly, it welcomes this independent review. Price Waterhouse will also review Merrill Lynch's compliance with the terms of the settlement reimbursement program.
 -0- 4/22/93
 /CONTACT: James R. Wiggins, 212-449-7280 or Fred Yager, 212-449-7355, both of Merrill Lynch & Co., Inc./
 (MER)


CO: Merrill Lynch & Co., Inc. ST: New York IN: FIN SU:

WB -- NY072 -- 9447 04/22/93 12:27 EDT
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Publication:PR Newswire
Date:Apr 22, 1993
Words:436
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