New York State Comptroller Thomas DiNapoli is suing Bank of America (BAC: 13.74 +0.59%) and Merrill Lynch over losses related to subprime mortgage investments.
The separate lawsuits against each company allege the firms violated securities laws. DiNapoli took the action as trustee of the $132.6bn New York State Common Retirement Fund, which sustained losses on investments related to subprime mortgages.
The lawsuit against BofA seeks recovery for losses incurred based on the company’s alleged “misrepresentation and concealment of material facts” regarding its purchase of Merrill Lynch, according to a statement from DiNapoli’s office.
“These companies thought they could get away with profiting at the expense of New York’s pensioners and taxpayers through fraudulent activities and misleading public disclosures, and they were mistaken,” DiNapoli said. “Today, these companies have been served notice that they will be held accountable for losses caused through their misconduct. Investors, like the Fund, can tolerate risk — it’s what we do — but we cannot tolerate this kind of corporate irresponsibility.”