Bank of America urges dismissing investor lawsuit
NEW YORK - Bank of America Corp has asked a Manhattan federal court to dismiss an investor class-action lawsuit over its Merrill Lynch & Co purchase, including disclosures about Merrill's losses and bonus payouts.
In an 87-page filing on Tuesday night, the largest U.S. bank said the plaintiffs failed to allege that anyone was misled about $3.6 billion of bonuses that Merrill paid, and that it was well-publicized that payments would be made.
Bank of America also said it was no secret that Merrill was losing money, and that it had no legal obligation to reveal Merrill's losses and outlook on an ad hoc basis, which it said could have whipsawed investors in unsettled markets.
The Charlotte, North Carolina-based bank also repeated that Merrill's losses accelerated after Dec. 5 shareholder votes on the merger rather than before.
There was no misrepresentation or failure to disclose required facts of any nature whatsoever, the bank's lawyers Mitchell Lowenthal, a partner at Cleary Gottlieb Steen & Hamilton LLP; and Peter Hein, a partner at Wachtell, Lipton, Rosen & Katz, wrote in Tuesday's filing.
They urged U.S. District Judge Denny Chin to dismiss the case with prejudice, meaning it could not be brought again.
Merrill lost $15.84 billion in the fourth quarter, but has returned to profitability since the merger closed on Jan. 1.
Ohio Attorney General Richard Cordray has been leading the investor lawsuit against Bank of America, officials, including departing Chief Executive Kenneth Lewis and directors. Among the plaintiffs are two pension funds in Ohio and one in Texas.
Bank of America is separately defending a lawsuit by the U.S. Securities and Exchange Commission over the bonuses, after a federal judge rejected a $33 million accord with the agency as inadequate. New York Attorney General Andrew Cuomo has threatened civil charges arising from the Merrill merger.
Bank of America's shares have lost roughly half their value since the merger was announced on Sept. 15, 2008.
The case is In re Bank of America Corp Securities, Derivative, and Employment Retirement Income Security Act (ERISA) Litigation, U.S. District Court, Southern District of New York, No. 09-2058. (Reporting by Jonathan Stempel, editing by Maureen Bavdek)
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