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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.Home > Blogs > A Matter of Opinion > Archives > 2010 > February > 08 > Entry
Editorial: Bank of America should be thinking settlement
Ohio has a big case pending against Bank of America. Two big state pension plans — for teachers and public employees — are claiming they lost about $85 million after the company bought Merrill Lynch during the financial market’s meltdown in 2008.
The charge is basically that Bank of America hid from its stockholders pertinent facts about Merrill Lynch, facts that sent Bank of America stock tumbling after the purchase. The facts in question were that Merrill Lynch had suffered huge losses and had paid huge executive bonuses.
Last week in New York, Bank of America settled a suit that was basically about the same charges.
That case was brought by the U.S. Securities and Exchange Commission. The company agreed to pay $150 million.
So, more than ever, it is good to see Ohio chasing money it thinks it lost unfairly. Also good to see is a resolution in at least one venue.
There are multiple venues. On the same day as the SEC settlement, New York Attorney General Andrew Cuomo filed a suit against two men who were top Bank of America executives during the purchase.
A few months ago, a judge consolidated cases from Ohio, Texas and Europe and wrapped other claims from all over the country under the court’s authority.
Theoretically, in the consolidated case a court could find against the company for more than $1 billion, making it one of the biggest civil cases ever.
Ohio Attorney General Richard Cordray was put in charge of the plaintiffs’ side, because Ohio is seeking the most money. He picked Dayton lawyer Dennis Lieberman, formerly chairman of the Montgomery County Democratic Party, as “Ohio counsel” in the case.
At this stage, lawyers are still interviewing witnesses and examining documents. In the spring, a judge is expected to rule on the company’s efforts to get the case dismissed.
Bank of America says it is being pursued for political reasons. Clearly, there’s something to that. The politicians sense a chance to do something the public wants. Ultimately, however, the courts and the laws are there to make sure the politicians don’t get carried away.
Consolidating the cases makes sense, in the name of getting the matter resolved and allowing everybody to move on. No point in airing the same charges over and over.
Meanwhile, having the politicians engaged has an upside: they are eager to get the matter resolved, so as to get some headlines about how much money they have won for their states.
Hopefully, Bank of America is moving toward settlement as a general strategy. That would be in everybody’s interest, as opposed to a case that goes on for years, which is always a real possibility in something this complex.
For companies to be held legally accountable for their behavior is entirely appropriate. Stockholders have certain rights. Those rights should be aggressively defended.
But Bank of America needs to move on. Whether or not it’s “too big to fail” — a phrase that has come to grate on American nerves — it certainly is tied in with the lives of many millions of Americans.
The company, the courts and the governments pursuing it need to bend efforts toward a resolution, as well as justice.
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Comments
By bobby
February 9, 2010 8:55 AM | Link to this
The pension funds are fortunate to be represented by the State of Ohio. Dennis Lieberman is fortunate to be chosen Ohio cousel. I was unaware of Mr. Lieberman’s expertice in securities litigation. Under normal circumstances one would expect BOA to bury Lieberman et al with the best litigators in the industry. In this case, Cordray knows the federal regulators will lean on BOA to settle the lawsuit.
By tanya phillips
January 19, 2011 5:00 PM | Link to this
Bank of America has went in our home.changed locks before it was foreclosed,would not give my realtor keys, took a judge to order keys to be sent than they sent the wrong keys. it took 1 year for that to happen. my husband was so sadden he had a pacemaker from the stress. i am disabled. They sent me other peoples information on another persons home. If you want someone to stand with you call me 772 361 2143. i knew one day this would happen. They need to be sued