Suit over Merrill acquistion moves ahead — now as a class-action

Judge gives approval to certification; plaintiff's claim BofA misled shareholders about bonuses, losses
JAN 29, 2012
By  John Goff
Bank of America Corp. investors won permission to proceed as a class action in their lawsuit claiming the company misled shareholders about the acquisition of Merrill Lynch & Co. U.S. District Judge Kevin Castel in Manhattan ruled yesterday that the claims in the case may go forward on behalf of all investors who held Bank of America common stock and call options from Sept. 18, 2008, to Jan. 21, 2009. Castel also certified a class of investors who held common stock on Oct. 10, 2008, and were entitled to vote on the Merrill acquisition. “Given the potential class size and the likelihood that individual recovery for some class members may be relatively modest, class certification is appropriate,” Castel wrote. The suit, filed in 2009, claims Bank of America failed to disclose information about bonuses to Merrill employees and about the firm's financial losses in the fourth quarter of 2008. The decision to grant class status allows investors to pool resources and gives their lawyers more leverage to push for a settlement with the bank. Lawrence Grayson, a Bank of America spokesman, declined to comment on the ruling. In July, Castel dismissed claims against Kenneth Lewis, the bank's former chief executive officer, over Bank of America's disclosure of federal financial assistance and over the shareholders' right to sue over certain types of securities. Congress held hearings in 2009 questioning bonuses paid to employees of Merrill, the brokerage acquired by the bank that year, even as the firm's losses triggered a federal bailout for Charlotte, North Carolina-based Bank of America. --Bloomberg News--

Latest News

Blackstone expects private credit market to soar to $30T
Blackstone expects private credit market to soar to $30T

Asset manager says current level if just a 'slither' of the opportunity

Zuckerberg now second richest person as Meta gains
Zuckerberg now second richest person as Meta gains

Facebook founder overtakes Amazon's Bezos

Departing Gurbir Grewal took the SEC "into new territory"
Departing Gurbir Grewal took the SEC "into new territory"

Having led the division of enforcement since 2021, Grewal's tenure included record penalties against firms for securities-law violations.

Choosing the name of your new RIA is "like getting married"
Choosing the name of your new RIA is "like getting married"

Name for new business should consist of values, beliefs and "the why", advisors say

B. Riley sees another top advisor jump ship
B. Riley sees another top advisor jump ship

“It makes you wonder what’s next,” says one recruiter.

SPONSORED Leading through innovation – with Tom Ruggie of Destiny Wealth Partners

Uncover the key initiatives behind Destiny Wealth Partners’ success and how it became one of the fastest growing fee-only RIAs.

SPONSORED Client engagement strategies, growth and retention in the down markets

Key insights from Gabriel Garcia on adapting to demographic shifts and enhancing client experience in a changing market