Judge grants pension funds access to BofA documents

Judge Denny Chin of the US District Court for the Southern District of New York has granted a plaintiffs' motion to partially lift the 'discovery stay', arguing shareholders would be "unduly prejudiced" without access to those documents.

The five pension funds leading the class action are: State Teachers Retirement System of Ohio; the Ohio Public Employees Retirement System; the Teacher Retirement System of Texas; Stichting Pensioenfonds Zorg en Welzijn, represented by PGGM Vermogensbeheer B.V.; and Fjärde AP-Fonden. (Global Pensions; September 29, 2009)

The compliant alleges that BofA agreed to allow Merrill to dole out some $5.8bn in bonuses, but declined to tell shareholders of the deal. It also claims senior executives at both firms also failed to inform shareholders Merrill was poised to suffer billions in losses.

Ohio Attorney General Richard Cordray said the ruling will allow the case to proceed more rapidly.

Cordray said: "The court granted our motion to partially lift the 'discovery stay' normally imposed in securities class actions, granting us access to documents that BofA has provided to Congress and investigators.

"Recent testimony to Congress suggests that BofA's executives knew that Merrill Lynch was suffering billions of dollars of widening losses before the shareholder vote, yet improperly withheld this information from investors. We are now rigorously exploring these facts in our shareholder class action against BofA."