BofA’s Merrill to Pay $131 Million Over Norma CDO Marketing
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Bank of America Corp.’s Merrill Lynch agreed to pay about $131 million to settle U.S. regulatory claims it failed to tell investors that hedge fund Magnetar Capital LLC had a role in selecting assets for two 2006 mortgage-backed securities.
Magnetar, which held both equity and short positions in the collateralized debt obligations known as Octans I CDO Ltd. and Norma CDO I Ltd., exercised significant influence over the selection of collateral for the investments, the Securities and Exchange Commission said today in a statement.