City A.M. Reporter
INVESTORS in a class-action lawsuit against Bank of America (BoA) over the Merrill Lynch takeover are trying to collect “billions of dollars” in damages, Ohio’s attorney general said yesterday. <br /><br />Attorney General Richard Cordray spoke after filing a 155-page complaint in Manhattan federal court that accuses BoA of fraudulently concealing Merrill’s soaring losses even as it let Merrill award $3.6bn (£2.3bn) of bonuses in 2008.<br /><br />Cordray is leading the case on behalf of five pension funds. Investors also want to recover damages from BoA chief executive Kenneth Lewis, chief financial officer Joe Price, chief accounting officer Neil Cotty, the bank’s board of directors, and former Merrill chief executive John Thain.<br /><br />“The amount of shareholder value affected here, negatively, is about as great as has been alleged in any case, ever,” Cordray said in a press conference. <br /><br />He said damages “could well be in the billions of dollars,” and that the investors are “not looking immediately to settle.”<br /><br />BoA spokeswoman Shirley Norton said: “We are confident we disclosed all that was required and look forward to presenting our position to the court.”<br />Up to last Friday, BoA shares had fallen 51 per cent since the merger was announced last September. <br /><br />US District Judge Denny Chin had on 1 July granted lead plaintiff status in the case to two pension funds in Ohio, and one each in Texas, the Netherlands and Sweden. <br /><br />A lead plaintiff helps direct litigation and is typically a large shareholder who also represents other shareholders.