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

Maryland bars advisor over charging excessive fees to clients
Maryland bars advisor over charging excessive fees to clients

Blue Anchor Capital Management and Pickett also purchased “highly aggressive and volatile” securities, according to the order.

Wave of SEC appointments signals regulatory shift with implications for financial advisors
Wave of SEC appointments signals regulatory shift with implications for financial advisors

Reshuffle provides strong indication of where the regulator's priorities now lie.

US insurers want to take a larger slice of the retirement market through the RIA channel
US insurers want to take a larger slice of the retirement market through the RIA channel

Goldman Sachs Asset Management report reveals sharpened focus on annuities.

Why DA Davidson's wealth vice chairman still follows his dad's investment advice
Why DA Davidson's wealth vice chairman still follows his dad's investment advice

Ahead of Father's Day, InvestmentNews speaks with Andrew Crowell.

401(k) participants seek advice, but few turn to financial advisors
401(k) participants seek advice, but few turn to financial advisors

Cerulli research finds nearly two-thirds of active retirement plan participants are unadvised, opening a potential engagement opportunity.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today’s choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave