Allegheny Energy settles Merrill Lynch litigation
- Allegheny Energy Inc. has agreed to pay Merrill Lynch & Co. Inc. $50 million in exchange for the securities firm's 2 percent interest in the power company's generation business to settle a lawsuit.
The settlement ends five years of litigation between the two companies over Allegheny Energy's $490 million purchase in 2001 of Merrill's energy trading business. Allegheny Energy said Merrill will turn over its 2 percent interest in Allegheny Energy Supply LLC, in exchange for a $50 million payment. All litigation and claims associated with the case will be dismissed.
In 2001, Allegheny Energy, hoping to cash in on what then was a burgeoning energy trading business led by Enron Corp., purchased Merrill's Global Energy Markets operation, and gave the securities firm a 2 percent stake in its Allegheny Energy Supply LLC.
One year later, Merrill sued Allegheny Energy over $115 million the securities firm claimed it still was owed from the deal. Allegheny Energy countersued, alleging Merrill had misrepresented the trading operation's revenue. Allegheny Energy said Merrill wanted to sell its trading business because it was run by a manager who lied about its finances.
The manager, Daniel Gordon, helped build Merrill's trading business and later headed the unit after Allegheny Energy acquired it. He pleaded guilty to fraud in 2003 and was sentenced to 42 months in prison for embezzling $43 million while he was working at Merrill.
Related News

Why Atomic Energy Is Heating Up Again
ONTARIO - In recent years, nuclear power has experienced a remarkable revival in public interest, policy discussions, and energy investment. Once overshadowed by controversies surrounding safety, waste management, and high costs, nuclear energy is now being reexamined as a vital component of the global energy transition. Here's why nuclear power is "so hot" right now:
1. Climate Change Urgency
One of the most compelling reasons for the renewed interest in nuclear energy is the urgent need to address climate change. Unlike fossil fuels, nuclear power generates electricity with zero greenhouse gas emissions during operation. As countries rush to meet net-zero…