Pension Funds to Lead Bank of America Investor Lawsuit
U.S. District Judge Denny Chin granted lead plaintiff status Tuesday to funds including the State Teachers Retirement System of Ohio, the Ohio Public Employees Retirement System and the Teachers Retirement System of Texas.
Investors are accusing Bank of America of misleading them about the state of Merrill’s health ahead of the Jan. 1 closing, even as it was becoming clear Merrill was on its way to what would be a $15.84 billion fourth-quarter loss.
A lead plaintiff in a securities class-action lawsuit helps direct the litigation and is typically a large shareholder who represents the other shareholder plaintiffs.
“Our public pension funds have been given both a great opportunity and a great responsibility,” Ohio Attorney General Richard Cordray said. “We now will work to hold Wall Street accountable and to protect the rights of Bank of America investors.”
Bank of America spokeswoman Shirley Norton declined to comment.
Bank of America shares have fallen 61 percent since the merger was announced last Sept. 15.
The merger has prompted Congressional hearings into why the Charlotte, North Carolina-based bank failed to back out of the merger or disclose more about Merrill’s health and the extent to which federal regulators pushed the bank to close.
The winning fund group beat out two the three largest U.S. public pension funds, the California Public Employees’ Retirement System and the California State Teachers’ Retirement System, for lead plaintiff status.
Others who sought to lead the case included the Central States, Southeast and Southwest Areas Pension Fund and the West Virginia Investment Management Board.
Bank of America has received $45 billion of federal bailout money and recently sold stock and assets to build a $33.9 billion buffer required by regulators who conducted a “stress test” of the bank’s ability to weather a prolonged recession.
Bank of America shares closed down 15 cents at $13.05 Wednesday on the New York Stock Exchange.
The case is Sklar v. Bank of America Corp, U.S. District Court for the Southern District of New York (Manhattan), No. 09-00580. (Reporting by Elinor Comlay and Jonathan Stempel; Editing by Richard Chang and Andre Grenon)
- EVs Head for Junkyard as Mechanic Shortage Inflates Repair Costs
- Beyond the Claim: How Social Canvassing is Transforming Insurance Fraud Detection
- California Chiropractor Sentenced to 54 Years for $150M Workers’ Comp Scheme
- DraftKings Sued Over ‘Risk-Free’ Bets That Were Anything But
- CoreLogic Report Probes Evolving Severe Convective Storm Risk Landscape
- Poll: Consumers OK with AI in P/C Insurance, but Not So Much for Claims and Underwriting
- Ship Owner in Bridge Collapse Seeks to Limit Its Liability
- Millions of Recalled Hyundai and Kia Vehicles, With Dangerous Defect, Remain on Road