Bank of America Corp (NYSE:BAC) seeks the dismissal of a class-action lawsuit filed by investors against the nations’ largest bank as measured by assets, saying there was nothing to the alleged hiding of data concerning the losses at Merrill Lynch and the payments of bonuses which were public knowledge, according to the financial giant.
The bank filed an 87-page brief saying the bonuses paid to executives at Merrill was very widely known, and the condition of Merrill as to its losses was also known by people of interest, including the investors as well. Of course the fact that Bank of America was buying them in order to salvage something of the company had to be known by investors all along.
What Bank of America is basing their request upon is they had no legal obligation to spell out every detail of the losses, which they claim could have made it worse on investors, moving them quickly in contrasting directions under the market conditions at the time.
Another key factor which may be more relevant to the situation is the shareholder vote on December 5 to accept the merger happened before the increase in Merrill losses, rather than the losses accelerating before the vote. That could undercut the strength of the shareholder case, as it would show there was no way Bank of America could have hidden something that hadn’t happened yet.
In the filing, the bank’s lawyers, Mitchell Lowenthal and Peter Hein stated “There was no misrepresentation or failure to disclose required facts of any nature whatsoever.”
This wasn’t only a request for a dismissal though, it was a request for a dismissal with prejudice, which means it could never be brought back to court again.
Bank of America has been fighting lawsuits on a number of fronts, including the highly publicized battle with the Securities and Exchange Commission, also over the Merrill Lynch deal, as well as the most recent separate lawsuits by BNP Paribas Mortgage Corp. and Deutsche Bank AG, over hundreds of millions in losses as the result of investing in commercial paper backed by assets.
Both of the banks say Bank of America misled them by not performing their gatekeeper role “reasonably and responsibly.” They claim the financial giant falsely released statements as to how much collateral they held concerning the commercial paper and didn’t track the mortgages held as security by them.
