San Francisco, CA (PRWEB) July 13, 2008
Two class action lawsuits filed against Bank of America, Banc of American Investment Services and Banc of America Securities are awaiting class certification by the Federal court. The cases are Bondar v. Bank of America Corporation, No. 08-CV-2599, No. 08-2599 (N.D. Calif.); and Bearnman v. Bank of America Corporation, No. 08-CV-115 (S.D. Calif.)
Both of the class actions allege that Bank of America deceived investors about the suitability, safety and liquidity of auction rate securities. If certified by the courts, members of the two class actions could include any Bank of America customer who purchased and continued to hold auction rate securities ("ARS"). The two class actions cover ARS purchases made between May 2003 and February 2008.
For millions of consumers, participating in a class action is an almost effortless process. Class members are seldom required to do much more than submit a proof of claim and wait for their share of the recovery. The primary disadvantage is that, even though class action settlements can be considerable, they must be distributed to a large class of customers. As a result, individual recoveries are relatively small.
Another option that is frequently overlooked is "opting out" of the class action and pursuing an independent claim. Customers who decide to opt out of a class action usually have a very short window of time in which to notify the court of their election to opt out. Alcala is representing a customer who is pursuing an arbitration claim against Bank of America Investment Services in connection with the sale of auction-rate securities to finance student loans.
"Customers that have suffered substantial investment losses could recover significantly more by pursuing their own private claim," says Brett Alcala, a San Mateo, California attorney who specializes in representing investors in securities arbitration claims. For example, Mr. Alcala obtained a $60,000 arbitration award for a SmithBarney customer who elected to "opt out" of a class action settlement that involved SmithBarney's Guided Portfolio Management services. According to Mr. Alcala, "had his client simply participated in the class action, she would have recovered only a small fraction of her actual damages." Mr. Alcala cautions, however, that only customers that can prove that their financial advisor put them in inappropriate investments given the customer's age or risk tolerance will fare better in arbitration.
The Alcala Law Firm based in San Mateo, California, handles disputes between public customers, brokerage firms and financial consultants through arbitration, mediation and litigation. Please direct all questions or inquiries to Brett A. Alcala, Esq. at (650) 343-4424 or by visiting http://www.securitiesdisputes.com.