Bank of America 2014 Annual Report Download - page 217

Bank of America 2014 215
On July 19, 2013, the court denied defendants’ motion to
dismiss Ambac’s contract and fraud causes of action but granted
dismissal of Ambac’s indemnification cause of action. In addition,
the court denied defendants’ motion to dismiss Ambac’s claims
for attorneys’ fees and punitive damages.
European Commission – Credit Default Swaps Antitrust
Investigation
On July 1, 2013, the European Commission (Commission)
announced that it had addressed a Statement of Objections (SO)
to the Corporation, BANA and Banc of America Securities LLC
(together, the Bank of America Entities), a number of other financial
institutions, Markit Group Limited, and the International Swaps
and Derivatives Association (together, the Parties). The SO sets
forth the Commission’s preliminary conclusion that the Parties
infringed European Union competition law by participating in
alleged collusion to prevent exchange trading of CDS and futures.
According to the SO, the conduct of the Bank of America Entities
took place between August 2007 and April 2009. As part of the
Commission’s procedures, the Parties have reviewed the evidence
in the investigative file, responded to the Commission’s preliminary
conclusions and attended a hearing before the Commission. If the
Commission is satisfied that its preliminary conclusions are
proved, the Commission has stated that it intends to impose a
fine and require appropriate remedial measures.
Fontainebleau Las Vegas Litigation
On June 9, 2009, Avenue CLO Fund Ltd., et al. v. Bank of America,
N.A., Merrill Lynch Capital Corporation, et al. was filed in the U.S.
District Court for the District of Nevada by certain Fontainebleau
Las Vegas, LLC (FBLV) project lenders. Plaintiffs alleged that,
among other things, BANA breached its duties as disbursement
agent under the agreement governing the disbursement of loaned
funds to FBLV, then a Chapter 11 debtor-in-possession. Plaintiffs
seek monetary damages of more than $700 million, plus interest.
This action was subsequently transferred by the U.S. Judicial Panel
on Multidistrict Litigation (JPML) to the U.S. District Court for the
Southern District of Florida.
On March 19, 2012, the district court granted BANA’s motion
for summary judgment on all causes of action against it in its
capacity as disbursement agent and denied plaintiffs’ motion for
summary judgment on those claims. On July 26, 2013, the U.S.
Court of Appeals for the Eleventh Circuit affirmed in part and
reversed in part the district court’s dismissal of the disbursement
agent claims against BANA, holding that there were factual
disputes that could not be resolved on a summary judgment
motion, and remanded the case to the district court for further
proceedings.
Dismissal of the other claims was affirmed on a separate
appeal. On December 13, 2013, the JPML remanded the action
to the District of Nevada for trial.
The parties have settled the action for $300 million, an amount
that was fully accrued as of December 31, 2014. Pursuant to the
settlement, plaintiffs have stipulated to the voluntary dismissal of
their remaining claims with prejudice.
In re Bank of America Securities, Derivative and
Employee Retirement Income Security Act (ERISA)
Litigation
Beginning in January 2009, the Corporation, as well as certain
current and former officers and directors, among others, were
named as defendants in a variety of actions filed in state and
federal courts. The actions generally concern alleged material
misrepresentations and/or omissions with respect to certain
securities filings by the Corporation. The securities filings
contained information with respect to events that took place from
September 2008 through January 2009 contemporaneous with
the Corporation’s acquisition of Merrill Lynch & Co., Inc. (Merrill
Lynch). Certain federal court actions were consolidated and/or
coordinated in the U.S. District Court for the Southern District of
New York (the District Court) under the caption In re Bank of America
Securities, Derivative and Employee Retirement Income Security Act
(ERISA) Litigation.
Plaintiffs in the consolidated securities class action (the
Consolidated Securities Class Action) asserted claims under
Sections 14(a), 10(b) and 20(a) of the Securities Exchange Act of
1934, and Sections 11, 12(a)(2) and 15 of the Securities Act of
1933 and asserted damages based on the drop in the stock price
upon subsequent disclosures. On April 5, 2013, the District Court
granted final approval of the settlement of the Consolidated
Securities Class Action. On November 5, 2014, the U.S. Court of
Appeals for the Second Circuit affirmed the final approval of the
settlement of the Consolidated Securities Class Action. On
February 3, 2015, the deadline for filing a petition for writ of
certiorari with the U.S. Supreme Court elapsed without any objector
filing a petition.
Certain shareholders opted to pursue their claims apart from
the Consolidated Securities Class Action. Following settlements
in an aggregate amount that was fully accrued as of December
31, 2013, the District Court dismissed the claims of these
plaintiffs with prejudice.
In addition, on January 11, 2013, the District Court approved
the settlement of claims filed by plaintiffs in a derivative action in
the Consolidated Securities Class Action, which also resolved a
consolidated derivative action filed in the Delaware Court of
Chancery.
In addition, the District Court dismissed a complaint filed by
plaintiffs in the ERISA actions in the Consolidated Securities Class
Action on August 27, 2010, and the parties stipulated to the
withdrawal of the appeal of that decision on January 14, 2013.
Interchange and Related Litigation
In 2005, a group of merchants filed a series of putative class
actions and individual actions directed at interchange fees
associated with Visa and MasterCard payment card transactions.
These actions, which were consolidated in the U.S. District Court
for the Eastern District of New York under the caption In Re Payment
Card Interchange Fee and Merchant Discount Anti-Trust Litigation
(Interchange), named Visa, MasterCard and several banks and
bank holding companies (BHCs), including the Corporation, as
defendants. Plaintiffs allege that defendants conspired to fix the
level of default interchange rates and that certain rules of Visa
and MasterCard related to merchant acceptance of payment cards
at the point of sale were unreasonable restraints of trade. Plaintiffs
sought unspecified damages and injunctive relief.