Merrill Lynch & Co. must defend claims that it inflated revenue at the energy-trading unit it sold to Allegheny Energy Inc. for more than $490 million, a Manhattan judge ruled.
U.S. District Judge Harold Baer refused to dismiss fraud and contract claims that Merrill overstated the performance of Global Energy Markets and hid the unit's sham trades with Enron Corp. Allegheny says Merrill wanted to rid itself of a troubled subsidiary run by a manager who engaged in "highly questionable -- if not outright criminal -- business practices."
