Merrill Lynch has until Friday to settle an auction-rate securities case with New York Attorney General Andrew Cuomo's office or it will face a lawsuit, Cuomo warned during a CNBC interview.
Cuomo said he has tried to reach a settlement with the Wall Street investment banker in the probe but has been unsuccessful.
His office has reached $42 billion in settlements with five other banks, including Citigroup , Morgan Stanley and Wachovia , during an investigation into whether the banks misled investors who bought the offerings thinking they were secure but in fact were attached to high-risk debts that collapsed.
"Today is the last day," Cuomo said. "If we don't settle today, tomorrow at this time we'll be in court."
He said he'd prefer to settle the case and help refund money to those who purchased the securities, just as he has with the other banks involved. He called the auction-rate securities case "an investor's worst nightmare."