After being investigated by the government for selling high risk bonds to retail investors, Merrill Lynch & Co., in a deal with the Securities and Exchange Commission, will buy back around $7 billion in auction-rate securities. They also had to agree to speed up their voluntary buyback plan, by repurchasing $10-12 billion in securities from investors by January 2nd. A $125 million fine was also included in the deal. The SEC reported that this will be of great assistance to any charities, small businesses, or retail investors hurt by Merrill, as it will allow them to "to restore their losses and liquidity."

With the auction-rate securities market, investors bought/sold securities to reassemble corporate debt. However, the interest rates were routinely reset at regular auctions. This caused many companies and retail clients to invest as their holdings could almost be used as cash. This all crashed when the market collapsed and investigators have been looking into the crash to see if the banks misled investors by marketing securities as much safer then they actually were.

NY Attn. General Andrew Cuomo has been leading the investigation into these types of organizations and so far has deals in place with 8 global banks to buyback almost $50 billion in auction-rate securities. Lauren Smith, an analyst with Keefe Bruyette & Woods, commented on the deals taking place saying, "We believe that the settlement should alleviate some of the negative overhang on the stock as the uncertainty surrounding the potential downside to the auction-rate securities issue appears to behind the firm,". While conducting research, her ¨Market Perform¨ rating on the stock was put at a goal price of $26.