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NYS comptroller takes action against Bank of America and Merrill Lynch for sub-prime securities risk

NationalMortgageProfessional.com
Jul 23, 2010

New York State Comptroller Thomas P. DiNapoli, as trustee of the $132.6 billion New York State Common Retirement Fund, has filed separate lawsuits against Merrill Lynch & Company and Bank of America for violating federal securities laws. “These companies thought they could get away with profiting at the expense of New York’s pensioners and taxpayers through fraudulent activities and misleading public disclosures, and they were mistaken,” DiNapoli said. “Today, these companies have been served notice that they will be held accountable for losses caused through their misconduct. Investors, like the Fund, can tolerate risk—it’s what we do—but we cannot tolerate this kind of corporate irresponsibility.” The lawsuit against Merrill Lynch seeks recovery for losses the Fund suffered from the defendants’ fraud and deception related to Merrill’s exposure to securities backed by risky sub-prime mortgages. The lawsuit against Bank of America seeks recovery for losses the Fund incurred based upon the company’s misrepresentation and concealment of material facts in connection with its purchase of Merrill Lynch, which also resulted in a $138 billion taxpayer bailout. DiNapoli filed the complaints in the U.S. District Court for the Southern District of New York to protect the interests of the more than one million members, beneficiaries and retirees who depend on the Fund for their pensions, and for the millions of New York taxpayers who help fund the state pension system. DiNapoli filed the complaints as administrative head of the New York State Retirement Systems and as trustee of the Fund. The law firm of Entwistle & Cappucci LLP is managing the lawsuits. For more information, visit http://www.osc.state.ny.us.  
Published
Jul 23, 2010
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