Bank of America sued by Dutch pension fund

22 March 2010

ABN has launched a law suit against Bank of America (BoFA) claiming that the institution withheld information during its acquisition of Merrill Lynch.

The Dutch pension fund stated that BoFA hid the full extent of Merrill Lynch’s losses - data which it claimed could have led to shareholders such as ABN rejecting the deal.

Details of BoFA’s decision to pay Merrill Lynch staff $5.8 billion in bonuses were also hidden, ABN claimed.

BoFA is being sued for over $90 million, the filing in New York revealed.

In a statement, APG was quoted by Bloomberg as saying: “There is no doubt that shareholders would have found the information withheld vital to an informed vote and rejected the merger if they would have had knowledge of the concealed facts.”

BoFA recently reached a settlement with the Securities and Exchange Commission to pay $150 million in compensation after being sued by the regulator for deliberately misleading shareholders over the Merrill Lynch acquisition.

The law suit was filed by the SEC over BoFA’s failure to reveal employee bonuses and financial losses at the company.

BoFA was initially fined $33 million in August 2009 before the second set of legal proceedings was initiated earlier this year.

By Jim Ottewill

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