COLUMBUS, Ohio (Legal Newsline) - Five public pension funds are attempting to be named lead plaintiffs in a class action lawsuit against Bank of America, Ohio Attorney General Richard Cordray said Wednesday.
The State Teachers Retirement System of Ohio, the Ohio Pubic Employees Retirement System and the Teacher Retirement System of Texas, as well as a Dutch national fund and a Swedish national fund, filed the motion in a New York federal court.
The suit alleges Bank of America made untrue statements and failed to disclose material information regarding its recent purchase of Merrill Lynch.
"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," said Cordray, formerly the state's treasurer.
"As one of the world's largest financial institutions, Bank of America should be held to the highest standards of corporate governance."
Bank of America's stock price was inflated and a new $10 billion worth of stock was facilitated because of the company's actions, Cordray said. Weeks after the Dec. 5 vote approving the purchase, it was revealed that Merrill Lynch incurred losses of more than $15 billion during the fourth quarter of 2008, and Bank of America executives had secretly demanded billions of taxpayer dollars to complete the deal, he said.
Since the deal, Bank of America's common stock has dropped more than 80 percent. Cordray says the five pension funds should lead the plaintiffs because they suffered significant losses from investing in Bank of America.
Cordray said the five funds lost approximately $274 million.
Recently, Michigan Attorney General Mike Cox was named lead plaintiff for a class action suit against American International Group. He's representing the State of Michigan Retirement Systems.
From Legal Newsline: Reach John O'Brien by e-mail at email@example.com.