BofA Investor Lawsuit Over Merrill Lynch Takeover Wins Class-Action Status

Feb 6 (Reuters) - Shareholders suing Bank of America Corp on Monday won class-action status for their lawsuit accusing the bank and various executives and directors of fraudulently misleading them about the 2008 takeover of Merrill Lynch & Co and size of Merrill's losses and bonus payouts.

U.S. District Judge P. Kevin Castel in Manhattan on Monday rejected Bank of America's effort to deny certification, after the lender claimed that investors could not prove they suffered losses after relying on materially misleading statements or omissions.

Bank of America had no immediate comment.

Investors had faulted Bank of America for not timely disclosing the scope of Merrill's soaring losses, which reached $15.84 billion in the fourth quarter of 2008, and for letting Merrill pay $3.6 billion of bonuses at the time.

The case covers a variety of investors who owned Bank of America stock or call options between September 2008 and January 2009. Class certification lets plaintiffs pursue their case as a group, which can cut costs, and can lead to larger recoveries than if plaintiffs were to sue individually.

Comments

[LoyalDem4646]

11:30 PM on 02/07/2012

When investors get lied to, they collectively pay for a class action suit because it wasn't their fault they got conned into a scam for the sake of making money. But home owners deserve to be taught a lesson for doing the same thing by being punished for not recognizing a scam.

[Martha Fair]

04:21 AM on 02/08/2012

What about those who through relocation were forced to sell their home for pennies because of the real estate market decline caused by the banks. Can we get back all the equity we lost? Who is going to pay for that? We certainly weren't resonsible for that reality...and neither were my neighbors when the sale of my devalued home tanked thier homes values down to nothing like a dominoe effect. Why do all the responsible homeowners have to suffer. Where is our justice and restitution?

[jwilson1]

01:16 PM on 02/07/2012

When a bank lies to it's own investors! What a shame!

They also lied to their customers! What a crime!

They lied to the government! Par for the course they work together!

[cats530]

12:16 PM on 02/07/2012

Throw Ken Lewis in jail.

[big tom]

06:45 AM on 02/07/2012

every week same story same players ... fraud fraud... why is no one in prison ?

[aforbes808]

09:07 PM on 02/06/2012

Big reward for the lawyers. Bigger reward for those who like watching Wall St. rats squirm.

[Dosadi]

08:10 PM on 02/06/2012

Class action status means the corporation makes a deal with the lawyers about how much the lawyers will get. Those that suffer will get basically nothing. It would be better to force the business to fight 30,000 individual claims. Each case should be heard on its own merit and if the bank loses then they lose and lose until they are no more.