Suit Takes on Banks’ Touting of WorldCom
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J.P. Morgan Chase & Co. and Bank of America Corp. publicly touted $10.1 billion in WorldCom Inc. bonds while privately lowering its credit rating and seeking to sell off some of their own stake in the company, a state pension fund that is suing the banks said.
The claim by the New York State Common Retirement Fund, the lead investor in a class action seeking damages related to WorldCom’s collapse, was made in papers filed in New York federal court opposing a request to a judge by investment banks to throw out the suit. WorldCom is now known as MCI Inc.
“The bank, along with WorldCom’s other financial advisors, was a victim of financial fraud and the deliberate concealment of it,” Bank of America spokeswoman Shirley Norton said.
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