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Bank of America Will Pay $165 Million to Settle Securities Complaints

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Charlotte, NCBank of America will reportedly pay $165 million dollars to settle securities claims related to mortgage-backed securities. The bank’s subsidiaries were alleged to have misrepresented the risks associated with the mortgaged-backed securities, costing the plaintiffs - credit unions - massive losses. The settlement was agreed to before a securities lawsuit was filed.

The Los Angeles Times (4/2/13) reports that Bank of America has not admitted any wrongdoing in agreeing to the settlement, which resolved claims from the National Credit Union Administration on behalf of five credit unions. Citigroup, Deutsche Bank and HSBC have previously agreed to similar settlements, totaling around $170 million.

Bloomberg Businessweek (4/2/13) reports Bank of America has so far spent more than $40 billion to settle claims related to home loans and foreclosures. The National Credit Union Administration announced in a news release (4/2/13) that it had obtained more than $335 million in legal settlements related to mortgage-backed securities. Other firms that face similar lawsuits include Wachovia, Washington Mutual and Bear Stearns, the National Credit Union Administration said.

Meanwhile, Citigroup will reportedly pay $730 million to settle allegations that it misled investors in matters regarding preferred stock and bonds, according to Forbes (3/19/13). Citigroup did not admit any wrongdoing in agreeing to the settlement, but said it had agreed to the settlement to avoid further litigation.

Before settlements can be finalized, however, they must be approved by a judge, and not all settlements have impressed the judges. According to a report in The Economist (2/13/13), several large settlements have been rejected by judges in the past year and a half. Those include a $285 million settlement between the SEC and Citicorp, a $13 million settlement over a Ponzi scheme, and a $600 million settlement between the SEC and SAC Capital Management.

The judges were reportedly upset that the banks and financial firms got away without admitting guilt, that there was a lack of clear reasoning for the settlement amounts and that the penalties were inadequate. One judge rejected the proposed settlement, worried that the company’s shareholders would be on the hook to pay the settlement, rather than the executives involved in the legal action.

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READER COMMENTS

Posted by

on
Bank of America has given my the runaround about refinancing my house. This process has been going on for about 3 mos now and i receive a phone call today saying i need more money to close than was expected and another credit check and more signed documents. Where do it end I'm so disappointed with them. They are currently the holders of my morgage.

Posted by

on
I need help with a mortgage that's been sold to bank to bank and no one can give me a title because the liens are not correct

Posted by

on
In 2001 through 2004 I was in a bankruptcy after I paid my debt countrywide called me to refinance but in my bankruptcy the house was paid off and I didn't know till I went to Bank of America and the agent said I didn't have a lien on the house so he gave me a draft for 153000 I waited the three days and changed my mind and gave back the draft. It wasn't till they sent me a payment book that I found out they put the contract through and didn't void it. This was in 2006 and I have not ever paid a payment on the house now it's been 7 years and they are trying to foreclose on me. I have tried to get copies of the papers from chase because that was the last bank that held a mortgage on the house but they have purged my file. If there is any information or help I would be very much appreciate your help. There is much more about this but that's the short story of it.

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