mail@shareholdersfoundation.com
Bank of America (NYSE: BAC) employees earlier this week filed a class-action lawsuit against their employer Bank of America (NYSE: BAC) and other 401(k) Plan fiduciaries, claiming the banking giant misled them and other shareholders about the impact of its Dec. 5, 2008 acquisition of Merrill Lynch, a move that the suit claims caused BAC shares to plunge in value, causing the employees' retirement fund to lose hundreds of millions of dollars.
If you are a former or current employee or are a member of any of Bank of America, Merrill Lynch investment plans or profit sharing retirement plans and purchased or held Bank of America, Merrill Lynch stock in one of those plans during the periods September 15, 2008 to present, you have certain options and you should contact the Shareholders Foundation, Inc. immediately!
Email: Mail@ShareholdersFoundation.com
or call us at +1-(858)-779-
The lawsuit, filed in U.S. District Court in New York, claims Bank of America (NYSE: BAC) violated the Employee Retirement Income Securities Act (ERISA) by failing to exercise the skill, care, prudence, and diligence required in administering employee retirement plans and assets. The suit claims specifically that Bank of America (BoA) proxy statements, sent to all BoA shareholders including employees who participated in the company's retirement plan, significantly overvalued Merrill Lynch's assets and did not disclose many aspects of the teetering investment-bank's financial condition. The employee 401(k) plan consists of two components, the employee stock ownership plan (ESOP) and the profit-sharing portion. All employees at Bank of America and its subsidiaries are eligible for enrollment and participation. As of December 31, 2007, the plan held about 75 million shares of BoA common stock, with a market value of $ 3 billion. According to BoA reports in early 2007, more than 200,000 employees participated in the plan.
Reports indicate BoA CEO Ken Lewis repeatedly assured employees that all was well with the company -- even on the eve of the stunning announcements that would send BAC shares tumbling.
Late last month, Bank of America stock dropped 50 percent from $10.20 a share on Jan. 14, 2009 to $5.10 a share on Jan. 20, 2009. Since September 2008, company stock has seen a total drop of 80 percent causing hundreds of millions of dollars in losses to the company's 401(k) plan. On Jan. 15, 2009, BoA issued a memo to employee plan participants claiming, "The core of our company, Bank of America, remains strong. We are one of the world's leading financial institutions with broad earnings diversity and a large growing deposit base."
In September 2008, Bank of America began talks with Merrill Lynch regarding an acquisition. Less than two days after talks began, BoA announced the acquisition and assured investors, including plan participants, that the company conducted due diligence in reviewing risks.
In November 2008, all shareholders, including employee Plan participants, received a detailed proxy statement urging shareholders to vote in favor of the acquisition. According to the lawsuit, the proxy contained material misstatements and omissions while significantly overvaluing Merrill Lynch's assets.
Leading up to the stock's collapse in January, stockholders and employees learned the company would receive a $20 billion investment in preferred stock from the federal government. Unfortunately, that same day the company announced fourth quarter losses of $1.79 billion and a shocking $15.31 billion fourth quarter net loss from Merrill Lynch, its recently acquired asset.
On Friday, January 30, 2009, 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:
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 are a former or current employee or are a member of any of Bank of America, Merrill Lynch investment plans or profit sharing retirement plans and purchased or held Bank of America, Merrill Lynch stock in one of those plans during the periods September 15, 2008 to present, you have certain options and you should contact the Shareholders Foundation, Inc. immediately!
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/
