Tuesday, September 29, 2009 at 4:09 PM
Legal analysts are still assessing the merits of a major lawsuit that Ohio's Attorney General is bringing against Bank of America, but in any case, they say… it's good politics. Ohio is the lead litigant along with the state of Texas, plus Sweden and the Netherlands. ideastream®'s Dan Bobkoff has more.
The suit alleges that the nation's largest bank illegally withheld information about billions of dollars in losses Merrill Lynch had suffered before shareholders voted on the shotgun merger between the two firms last year.
The argument is that if BOA shareholders had known about that and huge bonuses about to be handed over to Merrill executives, they might have voted the merger down.
Among those shareholders were the pension funds for teachers and other public employees in Ohio.
Paul Rose is a securities law expert at the Ohio State University and he says this case is, in a sense, Main Street versus Wall Street.
ROSE: This case is an opportunity for a lot of folks to express their displeasure with the way Wall Street has been doing business.
Attorney General Richard Cordray wants to get some of those lost billions back-though Cordray doesn't say exactly how much.
Rose of OSU says the suit has merit, but there's at least a tinge of politics here.
ROSE: You see the attorney general really drawing attention to the fact he's bringing this case, you can't help think there's some political motivation behind that. But even if there's political motivation, this is the kind of case he would pursue and that he should be obligated to be interested in.
Ohio’s attorney general isn’t the one going after Bank of America. Andrew Cuomo of New York charges the firm committed securities fraud. Bank of America says it disclosed all the information required and says it’s confident it will prevail in court.