Merrill Lynch Clients Granted Class Certification in Cash Sweep Lawsuit

Federal court rules clients meet requirements to proceed as certified class against financial institution.

Published on Feb. 26, 2026

Got story updates? Submit your updates here. ›

A federal court in New York has granted class certification to Merrill Lynch account holders who are suing the financial institution over its cash sweep practices. The class, led by plaintiff Sarah Valelly, was found to have met the federal requirements under Rule 23 of the Federal Rules of Civil Procedure to move forward with the lawsuit as a certified class.

Why it matters

This ruling allows the Merrill Lynch clients to collectively pursue their claims against the financial firm, which they allege improperly managed their cash sweep accounts. Class certification provides more leverage for the plaintiffs and increases the potential liability for Merrill Lynch if the lawsuit is successful.

The details

In her ruling, Judge Valerie E. Caproni determined the class is sufficiently numerous, their claims are typical of one another, and the members' interests and their counsel are adequate. The court also found the class is sufficiently cohesive to meet the predominance requirement under Rule 23(b)(3), and that a class action is the superior form of litigation for this case.

  • The federal court in New York issued its ruling on February 26, 2026.

The players

Sarah Valelly

The lead plaintiff representing the class of Merrill Lynch account holders in the lawsuit.

Merrill Lynch

The financial institution being sued by the class of account holders over its cash sweep practices.

Judge Valerie E. Caproni

The federal judge who granted class certification to the Merrill Lynch account holders in the lawsuit.

Got photos? Submit your photos here. ›

What’s next

The case will now proceed as a certified class action lawsuit against Merrill Lynch.

The takeaway

This class certification ruling empowers Merrill Lynch clients to hold the financial institution accountable through a unified legal action, rather than pursuing individual claims. The outcome of this case could have broader implications for how financial firms manage client cash sweep programs.