Bank of America lawsuit receives class action statusMay 24, 2012 12:20 pm Leave your thoughts
In Phoenix, lawsuits filed by investors are seen regularly in a business law firm. Often, a CEO or business owner may want to make their company seem superior and on good footing in talks with shareholders. Because of this desire, the manager may exaggerate the financial status of his or her company to its investors, which in turn can cause the investors to file a lawsuit.
An investor lawsuit was recently filed against Bank of America. According to Reuters, shareholders suing the bank won class action status for their suit in February. Various executives and directors of Bank of America have been accused of deceiving the investors in regards to the 2008 takeover of Merrill Lynch & Co as well as the amount of losses and bonus payouts at Merrill Lynch.
Investors feel that Bank of America is at fault for not providing information on Merrill Lynch's increasing losses, which totaled $15.84 billion in the fourth quarter of 2008. The company also paid a high number of bonuses – totaling $3.6 billion – during this same period.
In Manhattan, U.S. District Judge P. Kevin denied the bank's attempt to dismiss the lawsuit, which claimed that investors could not prove they suffered any losses. Bank of America accused the shareholders of presenting misleading information and false statements.
While the initial lawsuits covered a number of shareholders who either owned Bank of America stock or its call options, the recent move to class action status opens up this suit to many more possibilities. The plaintiffs may now sue as a group, which saves costs, and expect bigger recoveries from their alleged losses.
Lawsuits filed by shareholders are difficult to navigate for any business owner. Because of these difficulties, Arizona businesses that have been presented with an investor lawsuit may need the expertise of a business lawyer in Phoenix.
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