Bank of America (NYSE:BAC) Sued in Another Class Action

Bank of America (NYSE:BAC) has been sued in a class action suit, claiming the giant bank made false and misleading statements regarding mortgages and in preparation of paperwork for foreclosures.

The press release announcing the lawsuit is below.


Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Bank of America Corporation

SAN DIEGO--(BUSINESS WIRE)-- Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/bofacorp/) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of purchasers of Bank of America Corporation (“BofA”) (NYSE:BAC) common stock during the period between January 20, 2010 and October 19, 2010 (the “Class Period”).

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/bofacorp/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

The complaint charges BofA and certain of its officers and directors with violations of the Securities Exchange Act of 1934. BofA is a bank holding company and a financial holding company.

The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business. Defendants concealed defects in the recording of mortgages and improprieties with respect to the preparation of foreclosure paperwork that harmed BofA’s investors when BofA had to temporarily discontinue foreclosures and admit to the problems it was experiencing. For much of the Class Period, defendants also concealed that BofA had previously engaged in a practice known as “dollar rolling,” wherein it omitted billions of dollars in debt from its balance sheet reported to the public. As a result of defendants’ false statements, BofA’s stock traded at artificially inflated prices during the Class Period, reaching a high of $19.48 per share on April 15, 2010.

Beginning in May 2010, BofA began disclosing aspects of its “repo-to-maturity” transactions (dollar rolling), claiming the transactions did not have a material impact on BofA’s balance sheet. Later, in October 2010, BofA announced a nationwide foreclosure halt pending a review of its foreclosure processes and whether there were irregularities with respect to its previously completed foreclosure activities. Then, on October 19, 2010, BofA announced its third quarter 2010 financial results, reporting a net loss of $7.3 billion and a diluted earnings per share loss of $0.77. BofA further reported receiving $18 billion in claims about faulty home loans that it may have to repurchase. On this news, BofA stock dropped $0.54 per share, to close at $11.80 per share on October 19, 2010 – a one-day decline of 5% and a nearly 42% decline from the stock’s Class Period high.

According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) BofA did not have adequate personnel to process the huge numbers of foreclosed loans in its portfolio; (b) BofA had not properly recorded many of its mortgages when originated or acquired, which would severely complicate the foreclosure process if it became necessary; (c) defendants failed to maintain proper internal controls related to processing of foreclosures; (d) BofA’s failure to properly process both mortgages and foreclosures would impair the ability of BofA to dispose of bad loans; and (e) BofA had engaged in a practice known internally as “dollar rolling” to remove billions of dollars of debt from its balance sheet over the prior years.

Plaintiff seeks to recover damages on behalf of all purchasers of BofA common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Robbins Geller Web site (http://www.rgrdlaw.com) has more information about the firm.