Dutch giant APG sues Bank of America over Merrill Lynch acquisition

APG Asset Management, the wholly-owned fund manager of the €180bn Dutch civil servants pension fund ABP, has begun legal action in the US against Bank of America to recover losses it says it allegedly suffered as a result of the bank’s acquisition of Wall Street giant Merrill Lynch at the height of the financial crisis at the end of 2008. APG claims the bank “withheld material information from its shareholders” prior to the deal. These, it says, included expected quarterly losses at Merrill of over $15bn and an undisclosed agreement to pay up to $5.8bn in bonuses to Merrill staff. APG said: “There is no doubt that shareholders would have found the information withheld vital to an informed vote and rejected the merger if they would have had knowledge of the concealed facts.”
Bank of America declined to comment to RI. The lawsuitis the latest shareholder legal offensive against Bank of America. In September last year, a group of five pension funds, the Netherlands’ PGGM, Sweden’s AP4, the Ohio’s State Teachers Retirement System and its Public Employees Retirement System and the Teacher Retirement System of Texas, filed a class action suit against the bank relating to the merger. APG’s lawsuit is being handled by the US law firm Grant & Eisenhofer. The firm acted for shareholders including ABP in the action against Royal Dutch Shell over the misstatement of its oil and gas reserves, which resulted in a $450m settlement. According to filings, APG had 10.8m shares in Bank of America at the end of 2009, worth $184m. The US Securities and Exchange Commission sued Bank of America for a second time in January over the acquisition, accusing it of hiding Merrill’s losses.