Bank of America Corp.’s Merrill Lynch unit must face a class action suit on behalf of at least 1,800 investors over mortgage-backed securities, a federal judge ruled.
U.S. District Judge Jed S. Rakoff in Manhattan certified a class of all investors that purchased the securities from February 2006 through September 2007. Judge Rakoff also granted the investors’ request to appoint New York-based Bernstein Litowitz Berger & Grossmann LLP as lead lawyers for the class.
In the litigation, filed in 2008, the investors claim Merrill misled them in the offering documents for $16.5 billion of certificates. The investors claim the bank falsely claimed that the underlying mortgages complied with the stated underwriting guidelines.
The class certification allows the investors to combine their claims into a single suit rather than being forced to make them individually. The named plaintiffs in the case include the Mississippi Public Employees’ Retirement System, the Los Angeles County Employees’ Retirement Association, the Wyoming State Treasurer, the Connecticut Carpenters’ Pension Fund and the Connecticut Carpenters’ Annuity Fund.