How bad do things have to get that your own shareholders are now suing you?

I suspect Bank of America CEO Brian Moynihan might be able to answer that as he now finds himself in that situation. Moynihan is not alone, however, as the lawsuit also names the board of directors and other bank executives.

Shareholders are claiming BofA leaders failed to disclose billions (yes, with a B) of dollars in hidden debt as well improperly recorded mortgages. The lawsuit was filed in a New York state court this week and covers the bank’s actions from January 20-October 19, 2010. Among other things, shareholders experienced a major decline in the value of the bank’s stocks. Plaintiffs are contending BofA stock lost nearly 42% of its value in 2010.

Bank of America had no comment when asked about the lawsuit. Or maybe, like Charlie Sheen, they can’t get a PR firm to stick with them. Hard to know but one thing is certain, BofA has had more bad press coverage than just about any of the other mega banks.

Another accusation in the shareholder suit is that BofA did not “have adequate personnel to process the large numbers of foreclosed loans in its portfolio.” Well, gee, that shouldn’t be too hard to prove! Just ask anyone who deals with short sales or REOs!

Shareholders shouldn’t have a lot of difficulty proving these accusations. It’s pretty sad when your own shareholders want to haul you into court!