The California pension funds--which together own 21 million Bank of America shares, and both of which are active in commercial real estate nationwide--join eight other shareholder lawsuits filed against the Charlotte, NC bank. CalPERS says filing for lead plaintiff enables lawsuits to be consolidated and managed effectively.

Geoffrey Miller, New York University law professor, tells GlobeSt.com that CalPERS frequently acts as a lead plaintiff because "under the governing statute it is quite often the party with the largest financial stake in the litigation, and because it has a bit of an activist stance towards managerial issues."

In a statement, CalPERS board president Rob Feckner says "shareowners did not have complete or accurate information prior to approving the merger and the failure of Bank of America to provide it sent the stock price down dramatically," adding that bonuses paid to Merrill executives were not disclosed to shareholders prior to the merger which compounded the harm done."

Miller tells GlobeSt.com that cases alleging false statements in proxy information sent to shareholders in connection to votes on mergers are common, but the nation's financial crisis issue puts a special spin on this one. "Under normal conditions, this could be a pretty strong case, but these are not normal times," he says. "The courts are sensitive about putting the banks under more stress."

Further evidence of frustration with BofA arose this past Monday when a Houston investment bank, Finger Interests Number One Ltd., filed a notice of exempt solicitation with the Securities and Exchange Commission that urges BofA shareholders to vote against re-electing three bank board members including current chair and CEO Kenneth Lewis at their April 27 meeting. Finger's group also filed a shareholder lawsuit back in January after BofA revealed deeper losses by Merrill.

Finger's 1.1-million BofA shares extend back to the 1996 sale of Jerry Finger's Charter Bancshares to NationsBank, which was later acquired by Bank of America. Over the past year, the value of Finger's' BofA shares fell from $39.6 million to $6.8 million.

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