New York comptroller files lawsuit against BofA, newspaper reports claim

23 July 2010

Thomas DiNapoli, New York’s comptroller, has filed two lawsuits against Bank of America (BofA) and its Merrill Lynch division, newspaper reports have claimed.

The complaints against the financial institution stated that BofA neglected to inform shareholders of the full extent of Merrill Lynch's losses before it took over the business.

Merrill Lynch is accused of not ensuring shareholders were aware of its full exposure to the subprime mortgage market and its risk management procedures.

In a statement, Mr DiNapoli said: "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."

"They were mistaken," he added.

The merger of BofA and Merrill Lynch was completed on January 1st 2009.

According to the Wall Street Journal, the decision to file the lawsuits means that the comptroller has opted out of previous class-action lawsuits launched against the two institutions on behalf of shareholders.

Meanwhile, Mr DiNapoli has welcomed the recent signing of the US Financial Reform Bill, saying that it will “improve transparency and risk management” in the banking sector.

By Jim Ottewill

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