{"id":5199,"date":"2011-06-25T00:00:00","date_gmt":"2011-06-25T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/06\/bank_of_america_cop_bacs_merri"},"modified":"2022-04-05T11:24:28","modified_gmt":"2022-04-05T16:24:28","slug":"bank-of-america-cop-bacs-merri","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/bank-of-america-cop-bacs-merri\/","title":{"rendered":"Bank of America Cop. (BAC)\u2019s Merrill Lynch a Defendant of Class-Action Mortgage-Backed Securities Lawsuit Against at Least 1,800 Investors"},"content":{"rendered":"

U.S. District Judge Jed S. Rakoff has ruled that Merrill Lynch must face a class action securities fraud lawsuit over mortgage-backed securities. The class of at least 1,800 investors consists of the buyers of 31 tranches of MBS in 18 different offerings that were sold between February 2006 and September 2007. Merrill Lynch<\/a> is a unit of Bank of America Corp. (BAC)<\/a>.<\/p>\n

The investors, who filed their litigation in 2008, are accusing Merrill of misleading them in the offering documents for certificate valued at $16.5 billion and of falsely claiming that the underlying mortgages were in compliance with underwriting guidelines. Plaintiffs include the Los Angeles County Employees Retirement Association, the Mississippi Public Employees\u2019 Retirement System, the Wyoming state treasurer, the Connecticut Carpenters Annuity Fund, and the Connecticut Carpenters Pension Fund. The class action certification lets the investors put their claims together into one lawsuit rather than having to individually push their cases through.<\/p>\n

Meantime, Bloomberg.com is reporting that in a separate securities fraud lawsuit, also against Bank of America, U.S. District Judge William Pauley in Manhattan consolidated three cases accusing the investment bank of hiding the risks involved in mortgage-backed securities and of not using appropriate controls in processing foreclosures. The lead plaintiff in this case is Pennsylvania Public School Employees\u2019 Retirement System.<\/p>\n

Securities Class Actions<\/strong>
\n\u201cThe average net recovery for victims in securities class action claims is about 8% of their losses because such claims face many problems,” says Shepherd Smith Edwards and Kantas founder and securities fraud attorney William Shepherd<\/a>. “For example, only federal securities fraud claims can be made in such cases, which are often difficult to prove. However, investors who \u201copt out\u201d of the class in a timely manner can file their own individual claims, including under state law claims often easier to prove. Our stockbroker fraud lawyers has represented many investors who have opted-out of securities class actions.”<\/p>\n

Shepherd continues, “Unfortunately, many securities class action claims are filed with very short \u201copt out\u201d dates and some of these cases are later settled on terms that arguably favor the defendants while large payments end up going to the lawyers representing the investor\/ victims in the class. Many believe the true losers in such cases are the members of the investor class who suffered the losses. [We have no information at this time to suggest such a result in this matter.] \u201d<\/p>\n

Related Web Resources: <\/strong>
\nMerrill Must Face Class Action Over Mortgage Securitie<\/a>s, Bloomberg, January 20, 2011<\/p>\n

More Blog Posts:<\/strong>
\nNational Credit Union Administration Board Files $800M Mortgage-Backed Securities Fraud Lawsuits Against JP Morgan Securities, RBS Securities, and Other Financial Institutions<\/a>, Institutional Investor Securities Blog, June 23, 2011<\/p>\n

MBIA Can Sue Morgan Stanley Over Alleged Misrepresentation of MBS Risks, Says US New York Supreme Court<\/a>, Institutional Investor Securities Blog, June 14, 2011<\/p>\n

Dow Corning Corp.\u2019s $165M Securities Fraud Lawsuit Against Merrill Lynch & Co. Can Proceed,<\/a> Says District Court Judge, Stockbroker Fraud Blog, April 7, 2011<\/p>\n

Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

U.S. District Judge Jed S. Rakoff has ruled that Merrill Lynch must face a class action securities fraud lawsuit over mortgage-backed securities. The class of at least 1,800 investors consists of the buyers of 31 tranches of MBS in 18 different offerings that were sold between February 2006 and September 2007. Merrill Lynch is a […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3751,3804,3752,3800,3757],"tags":[],"class_list":["post-5199","post","type-post","status-publish","format-standard","hentry","category-bank-of-america","category-class-action-lawsuits","category-financial-firms","category-merrill-lynch","category-mortgagebacked-securities"],"yoast_head":"\nBank of America Cop. 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