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Bank of America to Pay Historic $2.43 Billion Securities Fraud Settlement
By Kimberly Mirando
UPDATE: A federal court has approved the $2.43 billion Bank of America Class Action Lawsuit Settlement! Class Members have until April 25, 2013 to file a claim.
Bank of America has reached a historic $2.43 billion class action lawsuit settlement related to its acquisition of Merrill Lynch at the height of the financial crises. It is the single largest securities class action settlement ever resolving a Section 14(a) claim — a provision designed to protect against misstatements in connection with a proxy solicitation.
The Bank of America settlement is also one of the four largest securities fraud settlements funded by a single corporate Defendant, and the largest securities fraud class action lawsuit settlement where executives of the Defendant were not criminally charged.
Shareholders alleged in the Bank of America securities fraud class action lawsuit that BofA and some of its officers made false or misleading statements about the financial health of both companies when BofA announced plans to buy Merrill Lynch in a $20 billion deal in September 2008 — on the same weekend that Lehman Brothers collapsed.
Bank of America later disclosed that Merrill would post $27.6 billion in losses that year, which significantly added to BofA’s financial woes. Bank of America subsequently asked for a $20 billion bailout from the government to help offset those losses, on top of the $25 billion it had already received.
Bank of America shareholders voted to approve the Merrill Lynch acquisition without these material facts on December 5, 2008. Bank of America’s stock price plunged when the facts were revealed in a series of disclosures in January 2009.
Plaintiffs in the Bank of America securities fraud class action lawsuit include the Teacher Retirement System of Texas, the State Teachers Retirement System of Ohio, and the Ohio Public Employees Retirement System, in addition to pension funds from Sweden and the Netherlands.
“Investing involves risk. But investors, whether pension funds or individuals, expect companies to provide accurate information so they can judge that risk,” said Ohio Attorney General Mike DeWine. “Misleading investors with wrong or incomplete information is unacceptable and costly.”
“There was general reference to losses, but never was the magnitude of those losses disclosed,” DeWine said. “This would be akin to telling someone to watch out for a pothole, when they were about to fall into the Grand Canyon.”
The Bank of America Securities Fraud Class Action Lawsuit Settlement case is In Re Bank of America Securities Derivative & Employment Retirement Income Sec. Act (ERISA) Litigation, Case No. 09-MDL-2058 (PKC), New York Southern District Court.
Updated April 9th, 2013
All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions
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2 thoughts onBank of America to Pay Historic $2.43 Billion Securities Fraud Settlement
My email has changed due to someone hacking into it.
I did a fraud case with Bof A 2006 or 2007. The bank sent my box of checks to the wrong address, and it was stolen., They accused me of writing bad checks, not knowing my checks were being written by other persons. I went to a Bof A branch, the supervisor looked up my account and began to give me a lecture on my checking account that was in the red. Not giving me a chance to explain she pulled up checks she said I cashed, I denied the allegations, I asked her to pull up my signature on file. It was no match and then she started to assist me and told me to go the P.D. and file fraud charges. I did and they still want me to pay for them, I had check security with the bank, but why am I still paying? I also had a warrant I did not know of for passing bad checks and went to jail. My bond was $15,000.00. I was told to stay in jail, from fri-mon. that monday i would be released on O R. My ex-‘s sister was in law enforcement and thats were I was advised to stay put due to the amount of the bond. I didn’t deserve that. I thought BofA fixed it. I am still getting non-payment letters.