‘ Bank of America Offers to pay £13 Billion to Settle Investigation into its Sales of Mortgage-Backed Securities ‘

#AceFinanceNewsUNITED STATES (Wall Street) – July 16 – Bank of America has offered to pay $13 billion to settle an investigation into its sales of mortgage-backed securities (MPA) 

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Citing people familiar with the matter, the Wall Street Journal reported that the bank met with the Justice Department Tuesday. The meeting did not yield any progress toward a final deal, however.
Bank of America had previously offered $12 billion to settle the probe. The DOJ countered with a $17 billion settlement, according to Reuters.Talks between the bank and the government have been acrimonious. Bank of America CEO Brian Moynihan requested to meet with Attorney General Eric Holder last month to hash out a deal, but Holder refused, saying the parties were too far apart for the talks to be productive.

At $13 billion, the bank’s offer would equal the payoutagreed to last year by JPMorgan. That settlement was the largest with a single entity in US history.
JP Morgan

(IBTimes October 20 2013) Reported that JPMorgan has agreed to pay one of the largest financial penalties in history after sealing a tentative $13bn deal with the US Department of Justice to put an end to a raft of government mortgage product related probes.According to sources cited by Reuters, although JPM has reached a bumper deal with authorities, the investment banking giant is not free of criminal liability and will have to continue to cooperate in criminal inquiries into individuals involved in the conduct at issue.At the beginning of the month, JPM’s  chief executive Jamie Dimon met US Attorney General Eric Holder to thrash out an original $11bn (£6.8bn, €8bn) deal to end the raft of mortgage-securities investigations in the investment bank.The bank already stumped up nearly $1bn in fines related to the London Whale trading scandal, which has cost the bank billions of dollars in legal losses.

On the same day JPM was ordered to refund $300m to customers after US regulators ruled that two million clients were harmed by the bank’s debt collection and other credit card practices.

Regulators also said that there were errors in the way the investment bank pursued customers through the court. However the refund order is not a fine, so regulators and prosecutors can still slap JPM with financial penalties in the future.

Only a few days ago, JPM revealed being hit by $9.2bn worth of legal expenses which resulted in the US banking giant posting its first ever quarterly loss under chief executive Dimon.

The legal expenses, which worked out as $7.2bn after taxes, include money JPM is setting aside for future settlements with authorities.

“While we expect our litigation costs should abate and normalise over time, they may continue to be volatile over the next several quarters,” said Dimon in a statement.

JPM was not ready to avail for comment at the time of publication. 
 

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