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A CNBC investigation has learned that the state securities regulator in New Hampshire is investigating hundreds of millions of dollars in alleged unauthorized trading, churning of customer accounts and excessive commissions at Merrill Lynch, as well as failure to supervise brokers in the firm's Boston office. CNBC has also learned that Merrill Lynch and the regulator are in settlement talks. Among those who allege they were cheated is Craig Benson, a former governor of New Hampshire and co-founder of computer networking firm Cabletron Systems, who tells CNBC that his losses alone totaled $100 million. Merrill Lynch says this is a case that "doesn't add up" and that Benson is a sophisticated investor.