Class Action Lawsuit Filed Against BankAmerica Over Securities Fraud Claims

Strategic Insights -

A class action lawsuit has been filed on behalf of investors who purchased BankAmerica common stock between August 4, 1998, and October 13, 1998. The lawsuit alleges that BankAmerica and its executives concealed the company's exposure to investments or loans to hedge funds, which was disclosed on October 14, 1998, resulting in a significant drop in stock value. The complaint charges the defendants with making false and misleading statements, which led to investor losses.

Key Takeaways:

  • The class action lawsuit was filed in the United States District Court for the Northern District of California, San Francisco Division, on behalf of a class of investors who purchased BankAmerica common stock between August 4, 1998, and October 13, 1998.
  • The lawsuit alleges that BankAmerica and its executives concealed the company's exposure to investments or loans to hedge funds, which was disclosed on October 14, 1998.
  • The complaint charges the defendants with making false and misleading statements, which led to a significant drop in stock value, causing the price of BankAmerica common stock to fall 11% in one day.
  • The lead plaintiff must be appointed by December 14, 1998, and meet certain legal requirements to serve in this position.
  • The law firms of Krislov & Associates, Ltd. and Kemnitzer, Anderson, Barron & Ogilvie are representing the plaintiffs in this case.
  • The law firms have extensive experience in complex litigation, including representing defrauded shareholders in class actions under state and federal securities laws.

Statistics:

  • The class action lawsuit involves a period of approximately 70 days, from August 4, 1998, to October 13, 1998.
  • The price of BankAmerica common stock dropped 11% in one day, October 14, 1998, following the announcement of a $372 million write-down on an investment to a D.E. Shaw hedge fund.
  • The lawsuit alleges that BankAmerica's executives concealed the company's exposure to investments or loans to hedge funds, which was approximately $20 billion.
  • The defendants' allegedly false and misleading statements led to investor losses, which are estimated to be in the hundreds of millions of dollars.

Sources:

  • Krislov & Associates, Ltd.
  • Kemnitzer, Anderson, Barron & Ogilvie
  • Private Litigation Securities Reform Act of 1995
  • Securities and Exchange Commission (SEC) guidelines for class actions under state and federal securities laws.