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Bank Of America: Justice Department Intends To File Civil Charges Against Us

Bank Of America: Justice Department Intends To File Civil Charges Against Us

Bank of America may be facing civil charges over mortgage backed securities and other mortgage-related matters.

The bank said in a regulatory filing Thursday that the Department of Justice told the company that it intends to file civil charges related to one or two jumbo-prime securitizations. The SEC is also considering filing civil charges against Merrill Lynch tied to a collateralized debt obligation investigation.

Banks used to regularly package mortgages into bundles known as CDOs, or collateralized debt obligations, and then sell them off in pieces to investors. Many went sour when the housing market collapsed.

Additionally, the filing said that the New York Attorney General’s office intends to file action against Merrill Lynch, following an investigation of some of its residential mortgage backed securities.

 

From the 10-Q:

The Corporation has been advised by the staff of the DOJ that it intends to file civil charges against Bank of America entities arising from one or two jumbo prime securitizations. The staff of the SEC has advised that they intend to recommend civil charges concerning one of those securitizations. The staff of the NYAG has advised that they intend to recommend filing an action against Merrill Lynch arising from their RMBS investigationIn addition, the staff of the SEC has advised that it is considering recommending civil charges against Merrill Lynch arising from its CDO investigation. The Corporation has been in active discussions with senior staff of each government entity in connection with the respective investigations and to explain why the threatened civil charges are not appropriate.

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