Tuesday, August 6, 2013

U.S. vs Bank of America- $850m Mortgage Bond Fraud

Next Please!  The Financial Fraud Enforcement Task Force set up by the government to pursue cases related to the 2008 financial crisis.  Accuses  Bank of America,  failed to disclose risks and misled investors in its sale of $850 million of mortgage bonds during 2008.  Ya Think?

In Tuesday's complaint, in federal court in Charlotte, N.C. The Securities and Exchange Commission filed a related suit against Bank of America.  The U.S. government alleges that the bank didn't comply with its own internal underwriting standards when it packaged prime jumbo loans into two securities it sold to investors. In total, more than 40% of the 1,191 mortgages didn't comply with the bank's standards, the government said.

The Justice Department also alleged that the bank concealed important risks associated with the mortgages backing the securities.   Both the SEC and Justice Department were moving ahead in their investigations. The charges open a new chapter for Bank of America, it's acquisitions of mortgage lender Countrywide Financial Corp. and brokerage firm Merrill Lynch & Co. at the height of the crisis have forced the firm, run since 2010 by Chief Executive Brian Moynihan, to set aside more than $42 billion in litigation expenses, payouts and reserves, according to company figures.

$42 billion to do battle, Bank of America said it will refute the government's allegations in court.   In a statement, Attorney General Eric Holder called the suit "the latest step forward in the Justice Department's ongoing efforts to hold accountable those who engage in fraudulent or irresponsible conduct."

Looks like The Ship is making awake, I had said once before you have to put a face on the money manipulated and that's in the trillions.  So from an old Bogart movie, "Here's looking at you, kid".


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