Following a loss of more than $100-million in Bank of America investments last year, two Ohio public pension funds are seeking to join a federal lawsuit against the financial company.

Following a loss of more than $100-million in Bank of America investments last year, two Ohio public pension funds are seeking to join a federal lawsuit against the financial company.

Ohio Attorney General Richard Cordray announced last week that his office would represent the Ohio Public Employees Retirement System (OPERS) and the State Teachers Retirement System of Ohio (STRS) in a class-action lawsuit against Bank of America Corp.

According to a March 25 announcement, OPERS and STRS will seek to join three other public pension funds -- the Teachers Retirement System of Texas; Dutch national pension and health-care fund Stichting Pensioenfonds Zorg en Welzijn; and Fjrde AP-Fonden, one of Sweden's largest pension funds -- in seeking lead plaintiff status in the lawsuit.

According to the suit, the five funds lost about $274-million in Bank of America securities from July 21, 2008, to Jan. 20, 2009. OPERS lost $67.8-million, and STRS lost $35.5-million in that time, court documents show.

The suit alleges that Bank of America made "untrue statements and failed to disclose material information in relation to its acquisition of Merrill Lynch," which allegedly inflated Bank of America's stock price. On Dec. 5, the suit states, shareholders approved the merger "based on a proxy statement that allegedly did not disclose material facts."

Weeks after the merger, Merrill Lynch showed losses of more than $15-billion. Bank of America's common stock has declined more than 80 percent since the merger was announced.

Cordray spokesman Ted Hart said Ohio became aware of the lawsuit after being contacted in January by law firms handling the case.

"We were approached by numerous special counsel -- outside firms," he said.

After consulting with OPERS and STRS and getting approval from those bodies' boards of trustees, Hart said, the attorney general's office decided to join the case in February.

"Our clients, the pension funds, had suffered significant losses," Hart said.

According to the motion filed on behalf of the five pension funds seeking lead plaintiff status, the funds should front the suit because of the "massive" losses they suffered.

Hart said lead status also would allow the state to give direction to the suit.

"The lead plaintiff has input in determining the direction of the case ... and it allows you to participate in shaping changes of any corporate governance," Hart said.

Because the Ohio attorney general's office does not have the capacity to handle the case, Hart said, it will retain outside counsel.

The case is being handled by three law firms: Bernstein Litowitz Berger & Grossmann, Kaplan Fox & Kilsheimer and Barroway Topaz Kessler Meltzer & Check.

Ohio will work closely with Kaplan Fox & Kilsheimer, Hart said, and the firms will be paid on a contingency basis, meaning the state would not have to pay any money up front, and payment would depend on the lawsuit's outcome.

Hart declined to give specifics of the contract, as details still are being worked out.

Shirley Norton, spokesperson for Bank of America, said Friday that she could not comment on the lawsuit but said "a flurry of pension funds" filed lawsuits last week.

"It started with California on Monday (March 23)," she said. "The lawsuit will take a long time."

Representatives from STRS and OPERS declined to comment on the lawsuit.

From July 1, 2008, to Feb. 28, 2009, the rate of return on all of STRS' investments was down 32 percent, or $24-billion, STRS spokeswoman Laura Ecklar previously said.

OPERS spokeswoman Julie Graham-Price has said the fund's assets had dropped 26.1 percent over the last year, or about $21-billion.

The motion for appointment as lead plaintiff was filed in the U.S. District Court for the Southern District of New York. The case name is Sklar v. Bank of America Corp., No. 09-CIV-0580 (S.D.N.Y.) (Chin, J.).

No hearing dates have been set for the case, Hart said.