Merrill Lynch to Pay Fines
                   Of $25 Million for Scandal

                   By PETER A. MCKAY
                   Dow Jones Newswires

                   Merrill Lynch & Co. agreed to pay $25 million in fines Wednesday for its
                   alleged participation as a financier in the Sumitomo Corp. trading scandal
                   that pummeled world copper markets in 1996.

                   Along with $10 million to be paid to the London Metal Exchange, the
                   Washington-based Commodity Futures Trading Commission will receive
                   $15 million, which officials believe is the first punishment the 25-year-old
                   agency has levied against a broker for "aiding and abetting" a client's
                   improper trading.

                   The sum is also the largest in LME history, the second-largest fine in
                   CFTC history and the second-largest Merrill has ever paid in any
                   disciplinary action. In a statement, Merrill Lynch said it negotiated the
                   settlements "to bring closure to" the regulatory proceedings and "to avoid
                   the expense and distraction of protracted litigation."

                                        Merrill Lynch negotiated with the two entities
                                        separately and neither admitted nor denied
                                        wrongdoing in the settlements. However, both
                                        the LME and the CFTC alleged the same
                   thing -- that Merrill provided financing for trading that it knew to be bogus.
                   Sumitomo trader Yasuo Hamanaka, who is now serving a prison term in
                   Japan for fraud and forgery, lost more than $2.6 billion in unauthorized
                   trades dating back to 1994.

                   "By failing to appreciate that its clients were attempting to manipulate the
                   market and by failing to pursue the concerns of its representatives,
                   [Merrill] assisted the attempt and failed to observe high standards of
                   market conduct," LME Compliance Director Alan Whiting said at a press
                   conference Wednesday.

                   When the CFTC first filed its complaint May 20, Merrill Lynch issued a
                   statement saying the agency's allegations were "without merit" and that the
                   company intended to defend itself against them. The CFTC's allegations
                   covered Merrill's dealings with both Sumitomo and another metals trading
                   firm, New York-based Global Minerals & Metals Corp.

                   For its part, Global Minerals maintained a defiant tone Wednesday.

                   "GMMC strongly disagrees with the LME's statements regarding
                   GMMC's trading activities, which are factually erroneous," company
                   attorney Peter Haveles said in a statement following the Merrill Lynch fine.
                   Phyllis Cela, the CFTC's acting enforcement director, said she believes the
                   Merrill Lynch settlement represents the first time the agency has fined a
                   broker for aiding and abetting market manipulation.

                   The Merrill Lynch fine, which approximates the amount of money it
                   allegedly gained from the Sumitomo scandal during 1995's fourth quarter,
                   is most likely the second-largest in the CFTC's 25-year history. Only the
                   $125 million penalty levied in May of 1998 against Sumitomo itself in the
                   same scandal was larger, Ms. Cela said.

                   Although such settlements are legally binding only for the companies
                   involved, Ms. Cela said the CFTC definitely wanted the Merrill Lynch fine
                   to send a practical message that commodity brokers should be more
                   vigilant about their clients' wrongdoing.

                   "Aiding and abetting is really an ancient concept that's been in the law for a
                   long time," she said.

                   "In that respect, we do hope that market participants take something away
                   from this, that they see it as something of a deterrent to aiding and
                   abetting."

                   Such an expansion of the CFTC's enforcement priorities certainly wouldn't
                   surprise many commodities industry insiders. Under the three-year
                   chairmanship of Brooksley Born, which ended in May, the agency's
                   relationship with brokers and exchanges grew particularly contentious as it
                   asserted more authority over issues such as the issuance of new derivatives
                   products and foreign exchanges' access to American markets.

                   "There has perhaps been something of a shift in their level of intention and
                   their level of aggressiveness, which is being brought to bear here as well,"
                   John E. Gross, a consultant who publishes the Copper Journal, said of
                   Wednesday's Merrill Lynch fine. Ms. Born's "approach has definitely been
                   to widen, rather than narrow, the scope and responsibility of the CFTC."

                   At the LME Wednesday, Whiting and Lord Bogri, chairman of the
                   exchange, declined to say whether it was continuing to investigate Global
                   Minerals & Metals or any other firm related to Sumitomo. Other people
                   close to the LME suggested that its investigation will go on.

                   -- Jeffrey L. Hiday in London contributed to this article.