Bank of America, US reach record 16.65-billion-dollar settlement

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Bank Of America
Bank Of America Posts Stronger Than Expected Profit
Bank of America
Bank of America

Bank of America has agreed to a record settlement of 16.65 billion dollars with the US government, amid allegations it sold troubled mortgage-backed securities leading up to the 2008 financial crisis, the US Justice Department said Thursday.

It is the largest settlement in history between the United States and a single company.

The case is one of a number pursued by the Justice Department that arose from the mortgage industry’s allegedly deceptive or abusive practices, which brought the US finance system to the brink of instability and provoked a global recession.

In the last year, Citigroup reached a 7-billion-dollar settlement, while JPMorgan Chase & Co agreed to pay 13 billion dollars in similar cases.

Bank of America’s penalties were compounded by its acquisition of subprime mortgage lender Countrywide Financial Corp in the early stages of the crisis, which engulfed the banking industry when the number of borrowers defaulting on their loans began to soar.

GNA
PDC

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