A federal judge in the Southern District of New York threw out two derivative shareholders lawsuits against Merrill Lynch & Co. Inc. executives and directors and ruled that Bank of America Corp.’s acquisition of Merrill strips Merrill’s shareholders of the standing to bring such suits.
The derivative cases, which include a consolidated case and a newer suit filed last year, were filed on behalf of the company against executives and board members. The claims include breach of fiduciary duties and waste of corporate assets for risky investments in mortgage-backed securities and collateralized debt obligations, which are portfolios of assets such as credit card debt, student loans, mortgages and subprime mortgages. In re Merrill Lynch & Co. Inc. Securities, Derivative and ERISA Litigation, No. 1:07-cv-09633 (S.D.N.Y.); Lambrecht v. O’Neal, No. 1:08-cv-06582 (S.D.N.Y.).
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