Magazine article American Banker

Lawyer Says Bank of America Breached Duty to Beneficiaries; Bank's Trust Management Draws Fire as Lawsuit Ends

Magazine article American Banker

Lawyer Says Bank of America Breached Duty to Beneficiaries; Bank's Trust Management Draws Fire as Lawsuit Ends

Article excerpt

LOS ANGELES -- The Bank of America profited at the expense of small trust beneficiaries, a lawyer charged Wednesday in closing arguments in Los Angeles Superior Court.

The comments came at the conclusion of testimony in a class action lawsuit alleging that the Bank of America made money while its trust department deliberately neglected to invest all idle trust cash.

"Bank of America should repay trust beneficiaries for use of that money," attorney Kevin O'Connell told Los Angeles Superior Court Judge Lester E. Olson, who is expected to decide the case early next year.

Defense attorneys were scheduled to present their final arguments later Wednesday.

"This is not a case in which money sat idle and no one benefited," said Mr. O'Connell, lead attorney for the plaintiffs. "Bank of America used the money and pocketed the proceeds without telling [the trust] beneficiaries."

Previous reports have estimated that the Bank of America could be liable for more than $100 million in damages.

Mr. O'Connell charged that the Bank of America deliberately ignored implementing cash management techniques in its trust department, even when those cash management systems might have reduced the cost of administering trust accounts by thousands, if not millions, of dollars.

"The conclusion is clear," Mr. O'Connell said. "It was not profitable for the bank to make the changes."

Making those changes would have been inexpensive, Mr. …

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