mail@shareholdersfoundation.com
On Friday another investor in Bank of America has filed a proposed securities class action lawsuit in relation to the recently announced substantial Merrill Lynch losses. The lawsuit was filed in United States District Court for the Southern District of New York on behalf of purchasers of Bank of America Corporation (NYSE:
If you purchased between Bank of America Corporation (NYSE:BAC) common stock during the period between July 21, 2008 and January 20, 2009, you have certain options and there are strict and short deadlines running (Deadline: March 27, 2009). You should contact the Shareholders Foundation, Inc. immediately!
Email: Mail@ShareholdersFoundation.com
or call us at +1-(858)-779-
According to the complaint the plaintiff alleges that between July 21, 2008 and January 20, 2009, defendants issued materially false and misleading statements regarding the Bank of America’s business and financial results. Defendants concealed Bank of America’s failure to properly value its mortgage-related assets and engage in proper due diligence in determining the fairness of its proposed merger with Merrill Lynch, Pierce, Fenner & Smith Incorporated. As a result of defendants’ false statements, so the lawsuit, Bank of America’s stock (NYSE:BAC) traded at artificially inflated prices between July 21, 2008 and January 20, 2009, reaching a high of $38.13 per share on October 1, 2008, and then retaining value in the 25 per share range even as the stock market collapsed in early October 2008. It was at this time that Bank of America sold 455 million shares of its common stock at $22 per share in a secondary common stock offering that raised some $10 billion. On December 5, 2008, shareholders of both Bank of America and Merrill Lynch approved the merger with Merrill Lynch. But then on January 16, 2009, Bank of America announced its first quarterly loss in 17 years. Bank of America announced a $1.8 billion loss for the fourth quarter of 2008, citing deeper trading and loan losses. Bank of America reduced its dividend from $0.32 to a penny a quarter. In addition to its own losses, Bank of America reported that Merrill Lynch’s preliminary results for the fourth quarter of 2008 indicated a net loss of $15.3 billion. Bank of America further confirmed that it would receive an additional $20 billion in assistance from the U.S. Government and that the government had agreed to provide guarantees against further Merrill Lynch losses of $118 billion. Over the course of the next several days, the complaint alleges, details began to emerge concerning the truth behind Bank of America’s deal with Merrill Lynch, including the fact that Bank of America had learned of Merrill Lynch’s substantial fourth quarter losses prior to completing its acquisition of Merrill Lynch. During a conference call Kenneth Lewis, the chief executive of Bank of America, said the bank was caught off-guard by the extent of the losses. "It wasn't an issue of not identifying the assets," he said. "It was that we did not expect the significant deterioration which happened in mid- to late December that we saw."
Between January 15 and 20, 2009, as news of Bank of America’s financial position came to light, Bank of America’s stock lost 50% of its value, declining from $10.20 per share on January 14, 2009 to close at $5.10 per share on January 20, 2009.
Meanwhile Merrill Lynch agreed to settle another class action lawsuit from last May by Ohio’s State Teachers Retirement System for $475M. The lawsuit alleged securities fraud on the part of the financial services company after Merrill Lynch’s stock fell when the company wrote down the value of billions of dollars in assets tied to subprime mortgages. According to this lawsuit Merrill Lynch executives had artificially boosted the stock price with misleading statements to investors ahead of the devaluation. Investors who bought common or preferred shares in Merrill Lynch between Oct. 17, 2006 and Dec. 31, 2008 were eligible for this class-action status. The settlement must be approved by a judge in U.S. District Court in New York. In addition to the $475Million settlement the employee class action brought under the Employee Retirement Income Security Act settled for $75Million, bringing the total to $550Million. The ERISA class action on behalf of employees was filed in 2007 by the firm’s employees over losses on its stock.
Merrill “vigorously disputed” the claims, said firm spokesman Mark Herr in a statement, but “we are pleased to have these lawsuits behind us.”
The FinancialWeek reported that Merrill said to have paid $4b in bonuses before U.S.-backed rescue by B of A. Merrill Lynch paid billions of dollars of bonuses to its employees, three days before completing its life-saving sale to Bank of America, the Financial Times reported on its website on Wednesday. Then on Friday John Thain was just three weeks after the Merrill acquisition, according to Wall Street Journal, asked by Bank of America Chairman and Chief Executive Kenneth Lewis to resign during a meeting at the former Merrill chief's office in lower Manhattan. The same day Bloomberg reported that Merrill’s Thain said to pay $1.2 Million to a decorator.
If you purchased between Bank of America Corporation (NYSE:
Email: Mail@ShareholdersFoundation.com
or call us at +1-(858)-779-
Shareholders Foundation, Inc.
Trevor Allen
3111 Camino Del Rio North - Suite 423 -
92108 San Diego
Tel:+1-(858)-
Fax:+1-(858)-
Mail@ShareholdersFoundation.com
www.ShareholdersFoundation.com
____________________________________________________________
Photo:
http://www.prlog.org/
