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Tuesday, December 7, 2010

Bank of America agrees to pay $137 million for bid-rigging practices (you have an account w/them because...???)

Bank of America's Statement on Bid-Riggin Charges
The bank said in a statement that it has taken steps to ensure
"these or similar practices would not occur again." 

The Wall Street Journal

Bank of America Corp. agreed to pay $137 million to federal and state authorities for municipal bid-rigging practices in the late 1990s and earlier this decade.

The agreement with 20 state attorneys general, banking regulators, the Department of Justice and the Securities and Exchange Commission is part of a larger push by the nation's largest bank by assets to rid itself of an array of legal headaches predating the financial crisis.

Earlier this year, the Charlotte, N.C., bank agreed to pay $108 million to settle charges that mortgage lender Countrywide Financial Corp. improperly charged customers before Bank of America purchased the firm in July 2008. The bank also reached a $150 million settlement with the SEC after the agency accused the bank of failing to disclose information during the acquisition of Merrill Lynch and Co.

Bank of America still faces a civil fraud lawsuit from New York Attorney General Andrew Cuomo, who accused the bank of deliberately misleading shareholders about ballooning losses at Merrill. It also is wrestling with several probes into its foreclosure practices, and mounting demands from mortgage investors that it repurchase large piles of troubled mortgages.

Bank of America's participation in a larger plan to fix prices in the municipal-bond derivatives market began in 1997 and lasted until 2004, according to the Justice Department. The scheme affected governments seeking to invest money earned through the issuance of municipal bonds.

Former employees colluded with bidding agents to have certain sales steered toward them, providing kickbacks to brokers and intentionally submitting losing bids "to foster the appearance of competition," said a group of state attorneys general that participated in the settlement.

The bank said in a statement that it has taken steps to ensure "these or similar practices would not occur again."  Complete Article

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