Bank Of America Subpoenaed Over Sale Of Securities

NEW YORK — Bank of America Corp. revealed Thursday that it has received subpoenas and requests for information from various state and federal regulators regarding its sale of auction-rate securities.

In a filing with the Securities and Exchange Commission, the Charlotte, N.C.-based bank said subsidiaries Banc of America Investment Services Inc. and Banc of America Securities LLC are cooperating fully with the requests.

Auction-rate securities are bonds whose interest rates are set at periodic auctions, on the basis of bids submitted. The market collapsed in February amid turmoil in the credit markets.

Regulators have been investigating some banks' involvement in the sale of the securities.

Earlier Thursday, Citigroup Inc. said it reached a settlement with the New York Attorney General and regulators to repurchase $7 billion in auction-rate securities and pay $100 million in fines.

Regulators claimed the investments were marketed as safe even when banks knew of liquidity risks during the downturn in the credit markets.

According to the SEC filing, four purported class action lawsuits have also been filed against Bank of America on behalf of purchasers of auction-rate securities. The cases relate to the sale of the investments between May 2003 and February 2008 and allege that the bank violated certain securities laws in regards to its marketing and sale of the securities.

The actions seek unspecified damages and attorneys' fees.

A related individual federal action as well as several related Financial Industry Regulatory Authority arbitrations have also been filed, the bank said.

A Bank of America representative was not immediately available for comment.

Bank of America shares tumbled $1.93, or 5.8 percent, to close at $31.52. Shares are down about 19 percent for the year.

Comments

[Kyler]

Sorry that link above should be scamorbam.com/banking_scam.html

[oldwiseone]

This is why Replublicans want small government

[oldwiseone]

This is why America needs big government

[Kyler]

I agree with you "themodernleader" in everything except the the swindle and fraud began in the Reagan era. It began long before this! I would say a great turning point would have been in 1913 with the passage of the federal reserve act.

What a great system, the American people can pay interest to a private corporation in order to print money that the congress could print free of charge!

For a great explanation of how our banking system came to be and how it works go to http://www.scamorbam.com/bankingscams.html

The american people need to educate themselves on the actual working of the finances of this country.

[OlderBudWeiser]

Great link. Scary.

[dukeitout]

All these financial systems will work if they are implemented by honest people. It isn't the system, or the branch (ex. federal reserve), etc that is causing the problem, it is the dishonest people that infiltrate them. You think the old cold war commies were bad, they had nothing on the market ever present sleeze element. More oversight is essential. To the nickel-grinders (mostly republicans) that don't want to pay for a little oversight, I say you are pennywise and pound foolish. There are a lot of crooks out there lurking in the shadows of the free and open market. Don't be so naive.

[ibsteve2u]

"It isn't the system, or the branch (ex. federal reserve), etc that is causing the problem, it is the dishonest people that infiltrate them."

So true, even with forms of government­...it is not the form of government, it is how much power a corrupt individual can attain within that government.

The Constitution is a great and inspirational force for good, but even it could not withstand Bush and the Republicans.

[zizyphus]

What have these "regulators" been doing the past seven years? Are they just waking up from hibernation or something?

[themodernleader]

The stark reality is emerging that in America corrupt practices have become everywhere from the top down since this Century was born. These practicices were permitted atarting from the President and Congress with the support of the Federal Reserve using our currency as free money for the actual perpetuators of fraud and swindle.
Such fraud and swindle was begun in the Reagan era. Those outlaws, Including one of the Bush boys,went essentially unpunished with an unexamined bailout of billions of our weakened currency.
When corruption goes unpunished and leadership behavior is not redirected, corruption becomes habitual and epedemic. And the citizens become innured to one unlawful episode (euphemisticly called scandal) after another. After a time lawlessness becomes endemic to the culture. Then the organization begins stepping back into a traditional society where the failure of self-government is replaced by the government of the indispensible man, elite group and military.
If we don't turn this organization back towards its original intent soon, there will be the predictable emergency and crisis that will make it forever impossible to turn around.