Baltimore County is considering a lawsuit against Merrill Lynch in hopes of recovering millions lost in a bad investment five years ago.
County Council members met in a closed briefing with County Attorney Mike Field, members of County Executive Kevin Kamenetz’s administration and the county auditor’s office on Monday to discuss the matter. County Council Chairwoman Vicki Almond said it dealt with a $21 million investment made in 2007.
Almond, a Reisterstown Democrat, said she believed all of the money was lost, though others who attended the meeting said the county lost most, but not all, of its investment.
Merrill Lynch spokesman Bill Halldin declined to comment.
The Kamenetz administration had asked the council to approve a contract for outside legal services Monday night, but Almond said members had many concerns and wanted to wait until next Tuesday’s meeting.
“We felt that it needed to be discussed openly at a work session before it was voted on,” Almond said.
Kamenetz chief of staff Don Mohler declined to comment on the briefing, saying it was confidential.
“At the appropriate time, it’ll be part of a public discussion,” he said.
Council members who attended the meeting said they could not comment in detail.
“It was confidential material that was discussed, but as with all things, the County Council will always be looking out for the taxpayers of Baltimore County,” said Councilman David Marks, a Perry Hall Republican.
According to people who attended the meeting, the county was approached by a law firm that has sued Merrill Lynch on behalf of other municipalities, including King County, Wash. Those people did not have the name of the firm; several attorneys from different firms are listed In court documents from the Washington case.
That county sued the firm in July 2010. The lawsuit, which is pending in federal court, claimed that Merrill Lynch sold debt securities to King County that it marketed as “safe, conservative and liquid money market investments,” but that the investments were tied to subprime mortgages and turned out to be “illiquid junk.”
That lawsuit described the case as “another example of what happens when a giant Wall Street bank chooses to elevate its thirst for profits above all else — over its duties to its clients and over its obligations to tell the truth.”
In a response filed in court, Merrill Lynch denied wrongdoing and called the complaint “a selective recitation of alleged historical facts and speculation, much of which is both irrelevant and inflammatory in tone and content.”