CalPERS and CalSTRS file BoA claim
US - CalPERS and CalSTRS are jointly bidding to be lead plaintiff in a class action lawsuit against Bank of America stemming from its merger with Merrill Lynch.
The two pension funds filed a claim in the US District Court in the Southern District of New York yesterday, according to a statement from the California Public Employees Retirement System and the California State Teachers' Retirement System.
The class action suit alleges BofA "misstated or omitted important information regarding Merrill Lynch's financial condition as Bank of America shareholders voted on the merger with Merrill Lynch," the pension funds said.
BofA purchased Merrill in September 2008 in a deal worth more than US$50bn. But in the fourth quarter alone, Merrill posted losses of more than $15bn which led the US Treasury to inject $20bn into BofA.
CalPERS board president Rob Feckner said: "Shareowners did not have complete or accurate information prior to approving the merger, and the failure of Bank of America to provide it sent stock prices down dramatically."
He added: "Compounding the harm to shareowners was the fact that bonuses were paid to Merrill executives early and were not disclosed to shareowners prior to the merger."
Merrill paid some $3.6bn in year-end bonuses even as the firm was reporting staggering losses.
Bank of America spokesman Scott Silvestri declined to comment.
The class action suit alleges BofA "misstated or omitted important information regarding Merrill Lynch's financial condition as Bank of America shareholders voted on the merger with Merrill Lynch," the pension funds said.
BofA purchased Merrill in September 2008 in a deal worth more than US$50bn. But in the fourth quarter alone, Merrill posted losses of more than $15bn which led the US Treasury to inject $20bn into BofA.
CalPERS board president Rob Feckner said: "Shareowners did not have complete or accurate information prior to approving the merger, and the failure of Bank of America to provide it sent stock prices down dramatically."
He added: "Compounding the harm to shareowners was the fact that bonuses were paid to Merrill executives early and were not disclosed to shareowners prior to the merger."
Merrill paid some $3.6bn in year-end bonuses even as the firm was reporting staggering losses.
Bank of America spokesman Scott Silvestri declined to comment.
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