(Reuters) - Shareholders suing Bank of America Corp (BAC.N) on Monday won class-action status for their lawsuit accusing the bank and various executives and directors of fraudulently misleading them about the 2008 takeover of Merrill Lynch & Co and size of Merrill’s losses and bonus payouts.
U.S. District Judge P. Kevin Castel in Manhattan on Monday rejected Bank of America’s effort to deny certification, after the lender claimed that investors could not prove they suffered losses after relying on materially misleading statements or omissions.
Bank of America had no immediate comment.
Investors had faulted Bank of America for not timely disclosing the scope of Merrill’s soaring losses, which reached $15.84 billion in the fourth quarter of 2008, and for letting Merrill pay $3.6 billion of bonuses at the time.
The case covers a variety of investors who owned Bank of America stock or call options between September 2008 and January 2009. Class certification lets plaintiffs pursue their case as a group, which can cut costs, and can lead to larger recoveries than if plaintiffs were to sue individually.
Reporting By Jonathan Stempel; Editing by Bernard Orr