“Judge Milton Pollack’s summary dismissal this week of three investor suits against Merrill Lynch has been embraced by an investment banking industry battered by years of litigation and criticism over its research practices,” writes Landon Thomas in today’s New York Times.

“Bank executives quietly concede, though, that the decision is not likely to have a significant impact on the many arbitration cases in which investors aim to prove that they relied on fraudulent stock research when they incurred their losses.”

“Judge Pollack bluntly declared that it was the collapse of the Internet bubble that caused investor losses and not research analysts like Henry Blodget, Merrill Lynch’s former Internet analyst. The ancient notion of caveat emptor was reaffirmed and by no less a legal authority than Judge Pollack, a 96-year-old judicial titan who has been handling complex securities law issues since the 1930’s.”

“Less noticed amid the excitement was that Judge Pollack appeared to be knocking down a straw man in throwing out the Merrill Lynch suits. Legal experts and analysts are in wide agreement that the class-action suits brought against Merrill Lynch were surprisingly frivolous: the investors were not clients of the firm and they did not make the case that they relied on Merrill Lynch’s research when they made their investment decisions.”

“Many of the plaintiffs were online investors, seeking short-term gains on volatile and risky stocks like 24/7 and Interliant.

“A large number of other arbitration cases aim to show that clients of Merrill Lynch and other brokerage houses relied on analyst research in making their decisions.”

Nowhere in his decision does Judge Pollack address this investor class, which, analysts say, has experienced billions of dollars of losses during the stock market collapse.”

” ‘These suits were an embarrassment, and Merrill should indeed be pleased,’ said E. Reilly Tierney, a brokerage analyst at Fox-Pitt Kelton. ‘But what he didn’t do was make clear what the threshold for reliance was.’ “