Bank of America N.A.
has been slapped with a class action lawsuit in connection with the bank's investment of assets held in its fiduciary accounts in its proprietary mutual funds.
The suit, filed in federal court in St. Louis on April 14, alleges that the bank improperly utilized assets in its fiduciary accounts to "bulk up" what was then known as the Nation Funds
. Bank of America allegedly purchased shares of various Nation Funds for these accounts despite the availability of other mutual funds which were well-managed and carried lower expenses, according to the complaint.
By pouring the assets into its own funds, "Bank of America had placed its own best interest before that of the beneficiaries of fiduciary accounts," said Steven Hamburg
of Summers, Compton, Wells & Hamburg, one of the lead counsels for the plaintiffs.
Bank of America Corp.
, Columbia Funds Series Trust
(formerly Nation Funds Trust), Columbia Management Advisors LLC
, Columbia Management Distributors Inc.
and Banc of America Investment Services Inc.
were also named as defendants in the suit, which was brought by eight beneficiaries of fiduciary accounts overseen by the bank.
Bank of America allegedly distributed various Nation Funds prospectuses that misrepresented material facts and/or omitted material facts concerning the conflicts of interests between and among the other defendants, according to the complaint.
Hamburg said two similar complaints had earlier been filed against the bank and the attorneys for the plaintiffs are set to argue for the consolidation of all three cases in Kansas City on May 25.
A spokesperson for Bank of America was not immediately available for comment.
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