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California AG Subpoenas Bank Of America On Troubled Securities: Report

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CALIFORNIA BANK OF AMERICA
The California Attorney General subpoenaed Bank of America for toxic securities. | Getty

The California state attorney general's office subpoenaed Bank of America Corp this week regarding the sale and marketing of troubled mortgage-backed securities to investors in the state, the Los Angeles Times reported.

The state is trying to determine whether the bank and Countrywide Financial had sold the securities to investors under false pretenses, the paper reported, citing a person familiar with the matter.

Bank of America bought Countrywide in 2008, leaving it with billions in losses from soured loans and lawsuits.

The subpoenas come as state attorneys general and federal officials are negotiating a broad mortgage settlement with Bank of America and other major lenders. California reportedly walked away from those talks two weeks ago, although it's possible the state could still sign onto an agreement.

Bank of America did not immediately return a call seeking comment from Reuters.

(Reporting by Rick Rothacker in Charlotte, North Carolina, editing by Gerald E. McCormick)

Copyright 2011 Thomson Reuters. Click for Restrictions.

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