More funds join BoA class action

Two of Ohio's state retirement schemes - the State Teachers Retirement System of Ohio and Ohio Public Employees Retirement System - and the Teacher Retirement System of Texas have joined Sweden's AP4 fund and Stichting Pensioenfonds Zorg en Welzijn (PFZW) from the Netherlands in seeking lead plaintiff status.

The funds have alleged losses of approximately US$274m as a result of holding BoA securities during the class period, between 21 July, 2008 and 20 January, 2009.

They claimed BoA "made untrue statements" and "failed to disclose material information" in relation to its $50bn acquisition of Merrill Lynch.

In the fourth quarter of 2008 alone, Merrill Lynch posted losses of more than $15bn,leading the US Treasury to inject $20bn into BoA. Despite this, Merill Lych still paid over $3.5bn in year-end bonuses even as the firm was reporting staggering losses.

Ohio attorney general Richard Cordray said: "It is of the utmost importance to enforce the rights of investors, including Ohio investors, against the wrongful conduct allegedly engaged in by Bank of America.

"As one of the world's largest financial institutions, Bank of America should be held to the highest standards of corporate governance. As alleged in the lawsuit, we believe that Bank of America executives had material information that raised serious reservations about the deal but they did not disclose this information to shareholders."

PGGM Investments, the asset management arm of health-care workers' pension fund PFZW, CIO Johan van der Ende added: "The Dutch pension fund PFZW suffered significant losses due to the alleged misrepresentation and nondisclosure of the relevant facts by Bank of America with respect to its and Merrill Lynch's financial condition.

"Apart from this, we believe we have a duty to represent global investors' interests by striving for adequate loss recovery for all shareholders and essential corporate governance restructuring of this company."

Earlier this week, the giant California Public Employees' Retirement System (CalPERS) and the California (CalSTRS) pension systems with combined assets in excess of $285bn applied for lead plaintiff status in the case (Globalpensions.com; 24 March 2009).