NEW YORK - Merrill Lynch & Co. said Wednesday it agreed to pay Sumitomo Corp. $275 million plus an undisclosed amount in legal fees in connection with losses sustained by the Japanese bank from unauthorized copper trading by a rogue employee.
Merrill Lynch, which made no admission of wrongdoing, was one of a group of five financial services companies in which Sumitomo had accounts that the trader used for his unauthorized dealings. The former employee is serving an eight-year prison term as a result of the scandal.
Sumitomo has lawsuits pending for a total of $1.7 billion against Chase Manhattan Corp., J.P. Morgan & Co., Credit Lyonnais, and UBS related to the incident. Wednesday's agreement released Merrill Lynch from any further claims stemming from the trading losses, the two companies said.
