Suit May Cost BOA $50B
From Steven M. Davidoff at the NYT:
This lawsuit, brought by Bank of America shareholders, claims that Bank of America and its executives, including its former chief executive, Kenneth D. Lewis, failed to disclose what would be a $15.31 billion loss at Merrill in the days before and after the acquisition. The plaintiffs contend that this staggering loss was hidden to ensure that Bank of America shareholders did not vote against the transaction…
[A] lawsuit seeking about $50 billion was brought by some of the largest class-action law firms and is quietly advancing in the Federal District Court in Manhattan…
[I]f it is true that Mr. Price, with Mr. Lewis’s assent, kept this information from Mr. Mayopoulos in order to avoid disclosure, this is a prima facie case of securities fraud…
A court will most likely calculate this by referencing the amount that Bank of America stock dropped after the loss was announced; this is as much as $50 billion. It is a plaintiff’s lawyer’s dream.
I’d like to see a full list of plaintiffs, out of curiosity. Reason being is I’d like to see how far this trickles down and if it gets to Main Street.
They have a year to settle. My guess is other factors will come into play before they go to trial. One way or another, BOA is toast.
And to think, I was just thinking we should start an effort to occupy BOA.