Public Pension Group Vies for Lead Plaintiff in BoA Suit

March 26, 2009 ( - A group of five public pension funds are jointly seeking lead plaintiff status in a class action lawsuit against Bank of America (BoA) over allegations BoA lied about losses at Merrill Lynch during BoA's 2008 Merrill acquisition.

Ohio Attorney General Richard Cordray said in a news release that the five public funds lost about $274 million from their transactions in BoA securities from July 21, 2008 to January 20, 2009.

The fund coalition involved in the case includes:

  • the State Teachers Retirement System of Ohio;
  • the Ohio Public Employees Retirement System;
  • the Teacher Retirement System of Texas, the largest Texas public pension fund;
  • Stichting Pensioenfonds Zorg en Welzijn, represented by PGGM Vermogensbeheer B.V., which is the Dutch national fund for the health care and social sector and the second largest pension fund in Europe; and
  • Fjärde AP-Fonden, which is one of the largest Swedish national pension funds.

“It is of the utmost importance to enforce the rights of investors, including Ohio investors, against the wrongful conduct allegedly engaged in by Bank of America. As one of the world’s largest financial institutions, Bank of America should be held to the highest standards of corporate governance,” said Cordray in the announcement.

The pension funds charged that the material misstatements and nondisclosures inflated Bank of America’s stock price and facilitated a new offering of $10 billion of company stock, and that the shareholder approval of the deal in December 2008 was based on a proxy statement hiding important facts.

After the acquisition was complete, it was revealed that Merrill Lynch incurred losses of more than $15 billion during the fourth quarter of 2008, and that Bank of America executives had secretly demanded billions of dollars in governmental assistance to complete the deal, the funds said. The price of Bank of America’s common stock has declined more than 80% since the merger was announced.

The motion for appointment as lead plaintiff was filed in the U.S. District Court for the Southern District of New York,  Sklar v. Bank of America Corp., No. 09-CIV-0580 (SDNY).