Secretary of the Commonwealth William F. Galvin today charged Merrill Lynch with fraud in pushing the retail sale of auction rate securities to investors, while misstating the stability of the auction market itself.

The complaint also charged Merrill Lynch with co-opting its supposedly independent research department to help sell auction rate securities.

The complaint seeks to order the financial services firm to make good on the sales of ARS that are now frozen, and make restitution to those who had to sell at less than par. The order would also censure the firm and impose an administration fine.