BofA for the Day: Congressional Committee Investigation, and Separately, Shareholder Class Action

How much would it suck to be a director for BofA right now? Apart from the continued dispute over the award of 2008 Merrill bonuses, BofA is also facing Congressional Committee requests for documents and a shareholder class action. All involve the same “was it worth it” or “could this be over already” 2008 acquisition of Merrill Lynch. (Stef emphasis). Specifically, the issue is Merrill losses in the fourth quarter of 2008. Merrill sustained consistent losses over the course of the first three quarters of 2008. The losses in the fourth quarter, however, were substantially higher. Documents suggest that BofA executives anticipated the fourth quarter substantial losses and did not inform BofA shareholders prior to the merger vote. Congress wants to know more and the shareholders want a payout.

As regards Congress: Ed Towns (D – NY), Chairman of the House Committee on Oversight and Reform, has requested additional documents from BofA related to Merrill’s 2008 fourth quarter loss, and as regards federal bailout money BofA received. Separately, Committee Member Dennis Kucinich (D - OH) has asked the SEC to launch an investigation into the same matter.

Shareholder Class Action: shareholders have filed suit against BofA (as well as Ken Lewis and John Thain) alleging the BofA proxy statement failed to disclose the Merrill 2008 fourth quarter losses prior to the merger vote.

Hat tip: Sue Reisinger at Law.com.

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