Wednesday, October 30, 2013

Bank of America's possible legal losses rise

Bank of America now believes it could lose another $5.1 billion over what it has already set aside for the multitude of legal issues facing the Charlotte bank -- a sharp increase from just three months ago, according to a quarterly securities filing made public Wednesday.

The bank also faces the possibility of two future lawsuits by the government, the filing shows. An unnamed U.S. attorney's office has recommended that the Department of Justice sue over mortgage bonds, the bank disclosed Wednesday. The New York Attorney General's office has also told Bank of America that it plans to sue Merrill Lynch after investigating residential mortgage backed securities it sold. That investigation was first disclosed in August.

The bank estimated it could lose $2.8 billion beyond its reserves in a similar filing in August. Investors have long worried that the bank's three-year legal saga might not yet be over, particularly after JPMorgan Chase set aside another $9 billion to handle legal issues in the third quarter.

In a quarterly earnings call with analysts earlier this month, Bank of America executives said they believe they have a handle on what the bank could still face.

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1 comments:

Anonymous said...

>> The New York Attorney General's office has told Bank of America that it plans to sue Merrill Lynch after investigating residential mortgage backed securities it sold. An unnamed U.S. attorney's office has also recommended that the Department of Justice sue over mortgage bonds.

Is this the same ML that govt. and the Fed begged/coerced BofA to absorb in the throws of the financial meltdown?