California Public Pension Funds Seek to Lead Bank of America Class Actions
CalSTRS and CalPERS Seek to Hold Bank of America Executives Accountable for Withholding Information in Merrill Lynch Merger
March 23, 2009
Sacramento, CA– The nation’s two largest state public pension funds filed a joint motion today with the U.S. District Court, Southern District of New York, to be designated lead plaintiff in class actions against Bank of America stemming from its merger with Merrill Lynch.
California Public Employees’ Retirement System (CalPERS) and California State Teachers Retirement System (CalSTRS) have taken this step to protect the retirement security of over two million members.
The class actions allege Bank of America management misstated or omitted important information regarding Merrill Lynch’s financial condition as Bank of America shareholders voted on the merger with Merrill Lynch. If appointed lead plaintiffs, CalSTRS and CalPERS will represent the claims of injured Bank of America shareowners.
“Despite these challenging economic times, we can’t give corporations a pass on their obligations to shareholders,” said Jack Ehnes, CalSTRS chief executive officer. “By moving to be appointed lead plaintiffs, we’re acting to supplement government enforcement of securities laws at a critical time for our nation’s economy. We’ve taken this step to hold the board and its management responsible to their owners.”
CalPERS Board President Rob Feckner said filing for lead plaintiff will enable lawsuits to be consolidated and managed effectively.
“Shareowners did not have complete or accurate information prior to approving the merger, and the failure of Bank of America to provide it sent the stock price down dramatically,” he added. “Compounding the harm to shareowners was the fact that bonuses were paid to Merrill executives early and were not disclosed to shareowners prior to the merger,” he said.
The California Public Employees’ Retirement System, with approximately $173 billion in assets as of January 31, 2009, administers retirement for California’s 1.6 million public servants. Go to CalPERS for more information about their retirement system.
The California State Teachers’ Retirement System, with a $114 billion portfolio, administers retirement, disability and survivor benefits for California’s 833,000 public school educators and their families from the state’s 1,400 school districts, county offices of education and community college districts. Go to CalSTRS for more information about their retirement system.