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Bank of America (Der) 2011.06.17 COMPLAINT-Pla D Gastineau w

Bank of America (Der) 2011.06.17 COMPLAINT-Pla D Gastineau w

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Published by: DinSFLA on Jul 25, 2011
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06/26/2013

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UNITED STATES DISTRICT COURTDISTRICT OF MASSACHUSETTS
DORIS GASTINEAU, an individual,Plaintiff,vs.CHARLES K. GIFFORD, THOMAS J.MAY, BRIAN T. MOYNIHAN,CHARLES O. HOLLIDAY, JR.,MUKESH D. AMBANI, SUSAN S. BIES,FRANK P. BRAMBLE, SR., VIRGIS W.COLBERT, D. PAUL JONES, JR.,MONICA C. LOZANO, DONALD E.POWELL, CHARLES O. ROSSOTTI,ROBERT W. SCULLY, WILLIAM P.BOARDMAN, BARBARA J. DESOERand KENNETH D. LEWIS,Defendants,andBANK OF AMERICA CORPORATION,Nominal Defendant.)))))))))))))))))))))))VERIFIED SHAREHOLDERDERIVATIVE COMPLAINT FORBREACH OF FIDUCIARY DUTYAND FOR VIOLATIONS OF §14(a) AND 20(a) OF THESECURITIES EXCHANGE ACTOF 1934JURY TRIAL DEMANDED
Case 1:11-cv-11096 Document 1 Filed 06/17/11 Page 1 of 78
www.StopForeclosureFraud.com
 
 2Plaintiff Doris Gastineau (“Plaintiff”), by and through her attorneys, derivatively onbehalf of nominal defendant Bank of America Corporation (“Bank of America” or the “Com-pany”), submits this Verified Shareholder Derivative Complaint against the defendants namedherein. Plaintiff’s allegations are based on personal knowledge as to herself and her own acts,and upon information and belief developed from the investigation and analysis of her counsel,which include, among other things, public filings by Bank of America with the U.S. Securitiesand Exchange Commission (“SEC”), press releases, news reports, analyst reports, matters of public record available from various state and federal government websites, complaints pendingagainst the Company in state and federal courts, and other information available in the publicdomain. To the best of Plaintiff’s knowledge, information, and belief, the allegations herein notbased on personal knowledge are likely to have evidentiary support after a reasonableopportunity for further investigation, discovery, and analysis.
I. SUMMARY OF THE ACTION
 1.
 
This is a shareholder derivative action brought on behalf and for the benefit of Bank of America against certain of its current and former directors. Bank of America is a globalfinancial services company, and provides consumers, corporations, governments and institutionswith a range of financial products and services. Plaintiff seeks to remedy the serious financialand reputational harm that Bank of America has suffered, and will continue to suffer, from theinadequate servicing of its troubled residential mortgage loans. Plaintiff also seeks redress forthe Company’s false and misleading Schedule 14A definitive proxy statement filed with the SECon March 30, 2011 (the “Proxy”).2.
 
Bank of America finds itself in this predicament because the IndividualDefendants named herein breached their fiduciary duties of loyalty to the Company and itsshareholders from at least January 1, 2009 to the present (the “Relevant Period”). Specifically,they failed to implement and maintain adequate internal controls to manage the foreseeablyimmense financial fall-out from inadequate residential mortgage loan underwriting standards—even though they reviewed, approved, and caused the Company to file financial statements
Case 1:11-cv-11096 Document 1 Filed 06/17/11 Page 2 of 78
www.StopForeclosureFraud.com
 
 3during that time with the SEC that depicted the Company’s increasingly distressed residentialmortgages in the magnitude of multiple billions of dollars of potential exposure. Moreover,these defendants have utterly failed and refused to pursue pecuniary relief for the Companyagainst any of the wrongdoers.3.
 
On April 13, 2011, the Office of the Comptroller of the Currency (“OCC”)publicized findings from its fourth quarter 2010 investigation into Bank of America’s mortgageservicing and foreclosure processing practices. As a result of that investigation, the OCCconcluded that Bank of America (through its wholly-owned subsidiary, Bank of America, N.A.):engaged in improper servicing and foreclosure practices; lacked sufficient resources to ensureproper administration of its foreclosure processes; lacked adequate oversight, internal controls,policies, and procedures, compliance risk management, internal audit, third party management,and trained personnel; failed to supervise outside counsel and other third parties handlingforeclosure-related services; and engaged in unsafe or unsound banking practices. The abovefindings were made public in the OCC’s formal enforcement agreement with Bank of America asset forth in the Stipulation and Consent to the Issuance of a Consent Order entered
 In the Matter of: Bank of America, N.A. Charlotte, NC AA-EC11-12
(the “OCC Consent Order”).4.
 
A few days prior to publication of the Consent Order, on March 29, 2011,Individual Defendants Susan S. Bies, Frank P. Bramble, Sr., Virgis W. Colbert, Charles K.Gifford, Charles O. Holliday, Jr., D. Paul Jones, Jr., Monica C. Lozano, Thomas J. May, Brian T.Moynihan, Donald E. Powell, Charles O. Rossotti, and Robert W. Scully executed the stipulationagreeing to the issuance of the OCC Consent Order. This order took effect on April 13, 2010upon its execution by an OCC official.5.
 
That same day, the Federal Reserve publicized the consent order to cease anddesist captioned
 In the Matter of BANK OF AMERICA CORPORATION Charlotte, NorthCarolina
, Docket No. 11-029-B-HC (the “Federal Reserve Consent Order”), approved of byBank of America’s board of directors (the “Board”) at a duly constituted meeting and thatrequires them to ensure that Bank of America, N.A. performs its obligations under the OCC
Case 1:11-cv-11096 Document 1 Filed 06/17/11 Page 3 of 78
www.StopForeclosureFraud.com

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