Bank Of America Agrees To $315M Settlement

Bank Of America Agrees To $315M Settlement Bank of America Corp. agreed to a $315 million settlement brought by investors claiming that the bank's Merrill Lynch unit misled them about the quality of its mortgage securities offerings.

Reuters reports that the investors, led by the Public Employees' Retirement System of Mississippi pension, claimed that Merrill Lynch provided false or incomplete information on the loans that backed 18 securities offerings. Although the securities were initially rated as investment-grade, most of them lost value and were reclassified at ‘junk’ status. The loans were made by another Bank of America unit, Countrywide Financial, and two now-defunct lenders, IndyMac Bancorp Inc. and New Century Financial Corp. Bank of America acquired Merrill Lynch and Countrywide in 2008.

The proposed settlement was filed with the U.S. District Court in Manhattan and will require the court's approval.

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