Wednesday, December 4, 2013

Bank of America agrees to $20M settlement in municipal derivatives case

Bank of America has agreed to a pay $20 million to settle a 5-year-old lawsuit that accuses it of rigging bids for municipal securities.

The proposed settlement was filed Wednesday in federal court in New York. It needs court approval.

The lawsuit, filed in 2008 against major banks, claims they participated in a conspiracy to fix prices of municipal derivatives. States, cities and counties invest bond proceeds in the derivatives until they are ripe.

The settlement comes on the heels of other settlements reached in the case, including with Morgan Stanley, JPMorgan Chase & Co. and Wells Fargo.

If approved, the settlement would resolve all claims against Bank of America.

State attorneys general have reached their own settlements with banks, including Bank of America, over municipal derivatives. Those settlements, coupled with Wednesday's, bring Bank of America's total settlement costs to approximately $82.5 million, according to court documents.