Ohio attorney general takes aim at Bank of America

9/30/2009

COLUMBUS - Ohio Attorney General Richard Cordray said he is chasing after greedy liars and cheaters on Wall Street like no other state attorney general nationwide, all in an effort to hold them accountable, recover losses for Ohio pensioners, and maybe force reforms in business practices.

Some of the cases that Mr. Cordray has been pursuing since taking office in January have resulted in multimillion-dollar settlements for investors and pension funds:

•$284.5 million from secondary defendants in a case against insurance giant AIG.•$475 million in a case against Merrill Lynch over misleading financial statements.

•$922 million in the UnitedHealth case that alleged the company back-dated stock options for executives.

But those cases may pale in comparison to the securities fraud litigation that Mr. Cordray is pursuing against Bank of America over its acquisition of Merrill Lynch.

Two of Ohio's public pension systems teamed up with retirement systems in Texas and Europe and won "lead plaintiff" status - the chance to handle the class- action case on behalf of all the shareholders.

Mr. Cordray alleged in an amended complaint late last week that Bank of America and Merrill Lynch purposely failed to disclose billions of dollars in known losses at Merrill Lynch until their merger was complete.

Once word got out, shareholders' value fell $50 billion within three days.

The value of the Ohio Public Employees Retirement System and the State Teachers Retirement System dropped by an estimated $84.8 million, according to court filings.

Bank of America also hid $5.6 billion in approved bonuses for Merrill Lynch executives and employees, the complaint said.

The case could take years to resolve.