By  on January 11, 2010

Iconix Brand Group Inc. filed a lawsuit against Merrill Lynch, Pierce, Fenner & Smith Inc. on Thursday accusing the financial adviser of fraud over the sale of $13 million in devalued auction rate securities.

Iconix engaged Merrill as a financial adviser in 2006 as the fashion group began to acquire its portfolio of home and apparel brands. In its complaint, filed in a Manhattan federal court, the company said its adviser encouraged it to invest in auction rate securities as part of its capital management plan. Lawyers for Iconix wrote that Merrill represented the securities to be safe and highly liquid.

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