Fraud Trial Part 2 Focuses On Accounting At Heilig-Meyers

Furniture World Magazine

The New York Times (www.nytimes.com) reported that, "A securities fraud trial involving some of the biggest names on Wall Street begins Tuesday in New York, opening a window into the sale of asset-backed securities. "A group of large institutional investors, led by the American International Group, sued Bank of America in 2003, accusing it of fraud and deceit in connection with its sale of $648 million in securities offered by the Heilig-Meyers Company, once the nation’s largest publicly traded retailer of home furnishings and a onetime darling of Wall Street. The plaintiffs, who bought about $300 million of the now nearly worthless securities, are seeking more than $530 million in damages and compensation." An earlier suit, the article noted, was dismissed. It charged that Bank of America had a conflict of interest and that investors were not informed that Heilig-Meyers kept two sets of accounting books. A new complaint charges that Bank of America misled investors as to the profitability of the now defunct retail chain.