Bank of America Corp. will pay $245 million to settle U.S. Securities and Exchange Commission allegations that it failed to disclose rising mortgage losses and the risks of bonds tied to home loans.
The SEC accord resolves two investigations, one that’s part of a $16.65 billion settlement ending federal and state probes, and another on securities fraud related to a residential mortgage-backed securities offering, according to a statement today on the agency’s website.
The deal required the Charlotte, North Carolina-based bank to admit it didn’t inform shareholders of potentially rising costs from agreements to repurchase mortgages issued from 2004 through the first half of 2008, according to the statement. In the other investigation settled today, the SEC accused Bank of America of failing to disclose that most of the loans backing a mortgage security were from a group described within the bank as “toxic waste,” the regulator said.
Bank of America’s “illegal conduct kept investors in the dark,” SEC’s Atlanta Regional Director Rhea Kemble Dignam said in the statement. The agency’s requirement that the bank admit to the behavior “provides an additional level of accountability for its violation of the federal securities laws.”
Bank of America agreed to pay $129 million in fines, $109 million in disgorgement, and interest of $6.62 million, according to the SEC statement.
To contact the reporter on this story: Jesse Westbrook in London at email@example.com
To contact the editors responsible for this story: Sara Forden at firstname.lastname@example.org Heather Smith