US two large state public pension funds filed a joint motion with the U.S. District Court, Southern District of New York, to be designated lead plaintiff in class actions against Bank of America stemming from its merger with Merrill Lynch.
California Public Employees Retirement System (CalPERS) and California State Teachers Retirement System (CalSTRS) have taken this step to protect the retirement security of over two million members.
The class actions allege Bank of America management misstated or omitted important information regarding Merrill Lynchs financial condition as Bank of America shareholders voted on the merger with Merrill Lynch. If appointed lead plaintiffs, CalSTRS and CalPERS will represent the claims of injured Bank of America shareowners.
CalPERS Board President Rob Feckner said filing for lead plaintiff will enable lawsuits to be consolidated and managed effectively.
Despite these challenging economic times, we cant give corporations a pass on their obligations to shareholders, says Jack Ehnes, chief executive officer, CalSTRS. By moving to be appointed lead plaintiffs, were acting to supplement government enforcement of securities laws at a critical time for our nations economy. Weve taken this step to hold the board and its management responsible to their owners.
Shareowners did not have complete or accurate information prior to approving the merger, and the failure of Bank of America to provide it sent the stock price down dramatically, continues Jack Ehnes.
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.
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