After resolving an impasse over how to punish the bank in a case over shoddy mortgages, the SEC has reached a decision in the massive settlement.
After resolving an impasse over how to punish Bank of America in a mortgage case, the Securities and Exchange Commission (SEC) has cleared the way for the lender to complete a $16.7 billion settlement. The case, which involves several federal agencies, is over sales of shoddy mortgage-backed securities.
In a private meeting last week, SEC commissioners voted to waive most of a set of additional sanctions that could have seriously curtailed the bank’s asset management business and ability to raise money for private companies, according to Reuters. The massive settlement, announced in August, stalled due to a dispute between SEC commissioners over the waiver.
However, the bank didn't come out completely unscathed. The SEC hit the bank with a penalty that takes away its ability to issue more shares or bonds without the agency's approval each time.
Bank of America’s settlement with the government is over sales of shoddy mortgage-backed securities during the run-up to the financial meltdown. The settlement is the largest with a single corporation in U.S. history. The U.S. Department of Justice is requiring the bank to pay $9.65 billion in cash to resolve more than a dozen federal and state investigations and provide $7 billion in consumer relief.
The deal also requires the bank to acknowledge misrepresenting the quality of mortgage-backed securities it sold, as well as those sold by its Countrywide and Merrill Lynch units. Those units, responsible for most of the shoddy loans, were acquired by Bank of America in 2008.
In a private meeting last week, SEC commissioners voted to waive most of a set of additional sanctions that could have seriously curtailed the bank’s asset management business and ability to raise money for private companies, according to Reuters. The massive settlement, announced in August, stalled due to a dispute between SEC commissioners over the waiver.
However, the bank didn't come out completely unscathed. The SEC hit the bank with a penalty that takes away its ability to issue more shares or bonds without the agency's approval each time.
Bank of America’s settlement with the government is over sales of shoddy mortgage-backed securities during the run-up to the financial meltdown. The settlement is the largest with a single corporation in U.S. history. The U.S. Department of Justice is requiring the bank to pay $9.65 billion in cash to resolve more than a dozen federal and state investigations and provide $7 billion in consumer relief.
The deal also requires the bank to acknowledge misrepresenting the quality of mortgage-backed securities it sold, as well as those sold by its Countrywide and Merrill Lynch units. Those units, responsible for most of the shoddy loans, were acquired by Bank of America in 2008.
