Bank of America Corp. today agreed to pay $460.5 million to settle securities fraud charges related to its underwriting of bond offerings for WorldCom Inc., confirmed Leonard Barrack, lead co-counsel for Alan G. Hevesi, New York Comptroller and court-appointed lead plaintiff. Mr. Hevesi, sole trustee of the $117.5 billion New York State Common Retirement Fund, Albany, had charged that the bank failed to perform proper due diligence on the telecommunications firm before selling its bonds to the public.
Mr. Barrack, founding partner of Barrack, Rodos & Bacine, said the trial of 15 remaining bond underwriters, accountant Arthur Andersen and WorldCom directors is scheduled to begin on March 21. The settlement with Bank of America "sends a strong message to the balance of the investment banks," he said.
In a statement, Bank of America officials said a settlement was in the best interest of shareholders, denied that it violated any laws and said it settled "in order to eliminate the uncertainties, expenses and distraction of further litigation."