Well, on the bright side, at least all of the lawsuits alleging Bank of America Corp. (BofA) misled investors in this instance will be consolidated into a single suit…
U.S. District Judge P. Kevin Castel yesterday ruled that investors suing BofA for making materially misleading statements about the 2008 takeover of Merrill Lynch & Co. will be given class action status. Judge Castel rejected BofA’s argument that the investors couldn’t prove that they suffered losses by relying on the bank’s statements or omissions.
The lawsuit will consolidate litigation that had been brought nationwide against the nation’s second-largest bank. Pension funds in Ohio, Texas, the Netherlands and Sweden were named lead plaintiffs, and the suit covers all manner of investors who owned BofA stock or call options between September 2008 and January 2009.
Also named as defendants in the lawsuit, In re: Bank of America Corp Securities, Derivative, and Employee Retirement Income Security Act (ERISA) Litigation, were BofA’s board of directors, CEO Kenneth Lewis, former CFO Joe Price and ex-Merrill Lynch CEO John Thain, among others.
In December 2011, BofA agreed to a $315 million settlement with some investors in response to the Merrill Lynch fiasco.
Unfortunately for BofA, this setback mitigates whatever good vibes remained from last Thursday’s win, when Allstate Insurance Co.’s lawsuit against the bank was dismissed. Allstate’s suit against another BofA unit, Countrywide Financial Corp., also alleged the mortgage lender misrepresented the $700 million in mortgage-backed securities that Allstate had purchased between March 2005 and June 2007.