New Jersey has sued Merrill Lynch & Co., claiming the securities firm sold $300 million of preferred stock to the state's investment division based on misleading information.

Merrill, which is a unit of Bank of America Corp., breached contract terms on convertible shares in a January 2008 offering that paid a 9% dividend, according to a complaint filed Tuesday in a Jersey City state court. The state Division of Investment agreed to exchange those shares in July 2008 for 11 million shares of Merrill common stock, according to the complaint.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.