Cordray
COLUMBUS, Ohio (Legal Newsline) - The proposed $475 million settlement between an Ohio public retirement fund and Merrill Lynch has been finalized, state Attorney General Richard Cordray said Tuesday.
Cordray, who represented the State Teachers Retirement System in a class action lawsuit against the company, said no challenges were made during a 30-day period after the settlement was approved Aug. 4.
The STRS was one of five lead plaintiffs in the case, which alleged Merrill Lynch wrote down billions of dollars in assets backed by subprime mortgages.
"This settlement marks a significant step forward in holding Wall Street accountable for the sub-prime meltdown and compensating those who were harmed by these alleged misstatements and manipulations," Cordray said.
"The settlement funds can now be disbursed to the investors, here in Ohio and elsewhere, who saw the value of their retirement savings and investments plummet."
The STRS sued in May 2008, claiming Merrill Lynch artificially inflated the price for its stock. Investors who purchased Merrill Lynch common stock or certain preferred shares between Oct. 17, 2006-Dec. 31 stand to recover damages, he said.
Cordray said it is the largest settlement of a securities class action suit in which an Ohio-based entity served as a lead plaintiff.
Cordray is also representing Ohio retirement systems in another case against Bank of America over its acquisition of Merrill Lynch.
The suit alleges Bank of America made untrue statements and failed to disclose material information regarding its purchase of Merrill Lynch.
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.
From Legal Newsline: Reach John O'Brien by e-mail at jobrienwv@gmail.com.