Merrill Lynch, Pierce, Fenner & Smith Inc. has agreed to settle allegations that it misled customers in order to get them to overpay for residential mortgage-backed securities.

Employees of the New York-based investment banking firm, which in January 2009 was acquired by Bank of America Corp., are accused of misleading RMBS clients.

Traders and salespeople at Merrill Lynch allegedly convinced customers to overpay for RMBS by deceiving them about the price it paid to acquire the securities.

Source: Mortgage Daily