National City Corp., a financial holding company based in Cleveland, agreed to settle a class action brought by the New York State Common Retirement Fund and other purchasers of National City common stock for allegedly misrepresenting the quality of mortgage loans backing its RMBS. The suit, filed in 2008, alleged that National City mischaracterized as prime approximately $10 billion in subprime loans, and misrepresented the loans’ quality and performance. Plaintiff alleged violations of Sections 10(b) and 20(a) of the ’34 Act and Sections 11 and 15 of the ’33 Act. National City will pay $168 million to the class. The settlement, announced on August 8, 2011, must still be approved by U.S. District Judge Solomon Oliver of the Northern District of Ohio. Press Release.
New York State Common Retirement Fund
New York State Common Retirement Fund Settles Securities Suit With Merrill Lynch/Bank of America
On January 13, 2011, the New York State Common Retirement Fund announced a $4.25 million settlement of a securities suit against Merrill Lynch and two former officers. In the suit, the Fund alleged that Merrill Lynch tried to cover up the extent of its involvement in subprime mortgage-backed securities, thus artificially inflating the value of its stock. The lawsuit had been filed in the United States District Court for the Southern District of New York in July. Press Release.