Here's a copy of the formal complaint from the Massachusetts Secretary of the Commonwealth charging Merrill Lynch with fraud in pushing auction rate securities as sweet deals even though the dealers knew that wasn't exactly the case. We haven't slogged through the eighty pages yet, but here's something you might like, from p. 7:
As one executive confided to a personal acquaintance in an email on November 19, 2007: "Market is collapsing. No more $2k dinners at CRU!! The Financials are being invicerated! (sic). More firings over at Citi...Inventory flooding the street. Going to be a great '08 trading environment."
Merrill Complaint [Office of the Secretary of the Commonwealth]