Ohio AG seeks billions from BofA

Chris Rizo Sep. 29, 2009, 5:45pm

Richard Cordray (D)

COLUMBUS, Ohio (Legal Newsline)-Bank of America is being sued by the Ohio attorney general over the banking giant's purchase of Merrill Lynch & Co., the Democrat's office said Monday.

Attorney General Richard Cordray is leading five pension funds in the lawsuit against Charlotte, N.C.-based Bank of America, which bought Merrill in January for $29.1 billion.

The lawsuit seeks billions of dollars in damages. The attorney general is accusing BofA and Merrill executives of hiding losses at the troubled brokerage firm at the same time discretionary bonuses were paid to executives before the deal closed Jan. 1.

A 155-page amended complaint was filed against the bank in U.S. District Court in Manhattan.

The lawsuit includes the State Teachers Retirement System of Ohio and the Ohio Public Employees Retirement System in addition to funds in Texas, Sweden and the Netherlands.

The suit seeks to recover damages from Bank of America CEO Kenneth Lewis; Chief Financial Officer Joe Price; the bank's chief accounting officer, Neil Cotty; the BofA's board of directors and former Merrill Chief Executive Officer John Thain.

"They were concealing billions of dollars in losses with one hand and clearing the way for extravagant bonus payments with the other," Cordray said in a statement. "This case gives the public pension funds and other shareholders a chance to stand up against Wall Street."

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