New York Attorney General pursues case without damages claim on BofA's Merrill Lynch acquisition
The New York Attorney General's Office has pursued the case without damages claim it filed against Bank of America over its acquisition of Merrill Lynch in 2009, Bloomberg reported. Spokesman Matt Mittenthal said New York Attorney Eric Schneiderman is proceeding with the lawsuit which also asked the court for an injunction that would bar persons from the securities industries and from sitting on public boards, the report said.
New York has alleged that Bank of America did not give accurate information to shareholders concerning the losses at Merrill Lynch so that it could get approval for the deal valued at $18.5 billion. In order to complete the acquisition, the state accused Bofa of manipulating the federal government so it could provide bailout financing from the Troubled Asset Relief Program of the Treasury Department, the report said.
Regulatory investigations, investor lawsuits and lawmakers' criticisms have hounded the lender over claims that it did not give shareholders enough warning about the growing losses being experienced by Merrill before they gave their nod of approval to acquire the brokerage in 2009, the report said.
On February 2010, then Attorney General Andrew Cuomo, who is now the Governor of New York, filed a case against Bank of America, its former Chief Executive Officer Kenneth Lewis and ex-Chief Financial Officer Joseph Price. Schneiderman was elected in November of that same year to take the place of Cuomo as Attorney General, the report said.
The first $15 billion bailout from US taxpayers was given to Bank of America in 2008 with Merrill taking $10 billion. After Merrill's losses went over $15 billion in its final quarter as an independent entity, BofA received a $20 billion bailout from taxpayers in January 2009.
BofA settled a shareholder class action lawsuit in 2012 for $2.43 billion over the losses of investors stemming from the acquisition of Merrill Lynch, the report said.