Bank of America settles mortgage securities class action

December 30, 2011 by

In early December, 2011, Bank of America Corp. (BAC) reached a $315 million settlement with a group of investors who sued its Merrill Lynch unit claiming they were misled about mortgage-backed securities, according to a court filing.

Holders of the asset-backed certificates sued Merrill Lynch starting in December 2008 for alleged “false and misleading” prospectus statements related to the securities, according to the complaint and a brief filed on December 5 in Manhattan federal court.

The investors said that inaccurate statements were made about qualifications of mortgage-loan borrowers, property appraisals and debt-to-income ratios of applicants, and that “the registration statement materially misrepresented the credit quality of the mortgage loans underlying the certificates.”

The $315 million will be distributed to certificate holders who submit valid claim forms, plaintiffs’ lawyers said in court papers.

The final approval hearing will be on March 21, 2012.  The lead case is Public Employees’ Retirement System of Mississippi v. Merrill Lynch & Co., 08-CV-10841, U.S. District Court, Southern District of New York (Manhattan).

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, consumer cases, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, employment matters, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.

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