Pension Funds to Get $2.43B in BofA Settlement

September 28, 2012 ( Ohio Attorney General Mike DeWine announced a historic $2.43 billion settlement in a class-action lawsuit with Bank of America (BofA).

The complaint alleges statements made in 2008 regarding the BofA merger with Merrill Lynch kept under wraps billions of dollars in known losses and billions more in accelerated agreed-upon bonuses to be paid to Merrill Lynch executives and employees (see “Lead Plaintiff Group in BofA Suit over Merrill Deal Files Amended Suit”). The lead plaintiff group includes the State Teachers Retirement System of Ohio; the Ohio Public Employees Retirement System; the Teacher Retirement System of Texas; Stichting Pensioenfonds Zorg en Welzijn, represented by PGGM Vermogensbeheer B.V.; and Fjärde AP-Fonden.    

It is estimated that the State Teachers Retirement System of Ohio and the Ohio Public Employees Retirement System will receive a total of $20 million. This could be higher or lower depending on the number of claims filed. In addition to the Ohio public pension systems, approximately 70,000 individual Ohioans are potential class members in the case.  

According to the DeWine’s announcement, the settlement is the single largest securities class action settlement ever resolving a Section 14(a) claim—the federal securities provision designed to protect against misstatements in connection with a proxy solicitation. The settlement is one of the four largest settlement amounts ever funded by a single corporate defendant for violations of the federal securities laws, and the settlement is the largest securities class-action settlement where executives of the defendant were not criminally charged.