But there may be hope for investors, including heirs of founding members, long-time Bank of America employees and others, who maintained large concentrated stock positions in Bank of America held with financial advisors in full-service brokerage accounts. Full-service brokerage firms are obligated to give, and investors in Bank of America stock are entitled to rely upon, brokerage firms for competent, suitable investment advice concerning risk management strategies for concentrated stock positions in Bank of America stock. Brokerage firms are required to supervise the activities in brokerage accounts, losses from concentrated stock positions in Bank of America stock can be attributed to the failure to adequately supervise the stockbroker and the brokerage account. Investment losses in Bank of America stock that are the result of unsuitable investment advice and/or failure to recommend appropriate risk management strategies for unprotected concentrated stock positions are both causes of action that may be available to investors against their full-service brokerage firm in an individual securities arbitration claim filed with FINRA.

Bank of America History of Mergers and Acquisitions

During the 1990s, Bank of America’s corporate growth strategy was to increase bank deposits through the acquisition of bank holding companies and their wholly-owned regional banks such as Seattle-First National Bank, Security Pacific National Bank, Continental Illinois National Bank and Trust Company and Penn Square Bank. In 1997, Bank America suffered substantial loan losses which resulted in the acquisition of Bank of America by Charlotte-based NationsBank and the merged bank assumed the name, Bank of America.

On January 11, 2008, Bank of America announced the purchase of Countrywide Financial for $4 billion in an all-stock transaction. Countrywide Financial shareholders’ investment was virtually wiped out when they received 0.1822 shares of Bank of America for each share of Countrywide Financial held. The purchase made Bank of America the largest mortgage originator and servicer in the U.S., controlling 20-25% of the home loan marketplace.

After the collapse of Lehman Brothers and the placement of Fannie Mae in conservatorship, Bank of America stood in the maelstrom of the financial system collapse. On September 15, 2008, Bank of America announced the acquisition of Merrill Lynch for $50 billion in an all-stock transaction. Merrill Lynch shareholders’ received 0.8595 shares of Bank of America for each share of Merrill Lynch held. The federal government provided guarantees against Merrill Lynch operating losses which ultimately became insufficient to offset the financial hemorrhaging from the acquisition of the brokerage giant.

The losses from the acquisition of Countrywide Financial and Merrill Lynch continued to erode Bank of America’s retained capital which has been reflected in the stock price which has declined precipitously since the high profile acquisitions. For many investors, Bank of America stock represented a long term holding acquired through investment, inheritance or as a founding member of a predecessor bank. Many Bank of America investors held the stock for the dividend which was considered to be a safe and stable source of income. Bank of America investors should consider what recourse is available to recover their investment losses for shares held with a full-service brokerage firm.