BofA Probed by New York Over Mortgage Securities
Stock Chart for Bank of America Corp (BAC)
New York Attorney General Eric Schneiderman, who sued JPMorgan Chase & Co. (JPM) last year over losses on mortgage bonds, is probing the purchase, securitization and underwriting of home loans and mortgage securities, the bank said yesterday in a regulatory filing.
The bank, based in Charlotte, North Carolina, said it “continues to cooperate fully” with the investigation. The U.S. Securities and Exchange Commission is investigating practices by the bank’s Merrill Lynch unit related to collateralized debt obligations, including valuation and marketing, according to the filing.
Schneiderman is the co-chairman of a state and federal group established last year to investigate misconduct in the mortgage-securities market. The group includes the U.S. Justice Department and the SEC.
New York sued JPMorgan in October, claiming Bear Stearns, the investment bank acquired by JPMorgan, defrauded investors. Schneiderman, who also sued Credit Suisse Group AG (CSGN), said the JPMorgan case would be a template for other actions against banks.
James Freedland, a spokesman for Schneiderman, declined to comment on the bank’s filing.
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