This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/news/business-28880307

The article has changed 5 times. There is an RSS feed of changes available.

Version 0 Version 1
Bank of America in record $16.7bn mortgage settlement Bank of America in record $16.7bn mortgage settlement
(35 minutes later)
Bank of America has agreed to pay a record $16.7bn (£10bn) to US authorities for misleading investors about the quality of loans it sold.Bank of America has agreed to pay a record $16.7bn (£10bn) to US authorities for misleading investors about the quality of loans it sold.
It is the largest settlement since the subprime crisis in the US, when thousands of people lost their homes.
The loans were sold by Countrywide Financial and Merrill Lynch before Bank of America bought them in 2008, at the height of the financial crisis.The loans were sold by Countrywide Financial and Merrill Lynch before Bank of America bought them in 2008, at the height of the financial crisis.
The associate attorney general said "no institution is either too big or too powerful to escape" punishment.
The settlement will cut the bank's third-quarter profits by $5.3bn.The settlement will cut the bank's third-quarter profits by $5.3bn.
Bank of America will pay a total of $9.65bn in cash and provide consumer relief worth about $7bn. The cash component consists of a $5bn civil penalty and $4.63 billion in compensation payments.Bank of America will pay a total of $9.65bn in cash and provide consumer relief worth about $7bn. The cash component consists of a $5bn civil penalty and $4.63 billion in compensation payments.
Rhea Kemble Dignam, regional director of the Securities and Exchange Commission's Atlanta office, said: "Bank of America failed to make accurate and complete disclosure to investors and its illegal conduct kept investors in the dark. Tony West, the associate attorney general, explained: "It's kind of like going to your neighbourhood grocery store to buy milk advertised as fresh, only to discover that store employees knew the milk you were buying had been left out on the loading dock, unrefrigerated, the entire day before, yet they never told you.
"Requiring an admission of wrongdoing as part of Bank of America's agreement to resolve the SEC charges filed today provides an additional level of accountability for its violation of the federal securities laws." "And just like you might be in for an unpleasant surprise when you got home and poured yourself that glass of milk, investors -- such as public pension funds and federally-insured financial institutions -- were unpleasantly met with billions of dollars in losses when those securities investments soured."
Brian Moynihan, chief executive of the bank, said: "We believe this settlement, which resolves significant remaining mortgage-related exposures, is in the best interests of our shareholders, and allows us to continue to focus on the future."Brian Moynihan, chief executive of the bank, said: "We believe this settlement, which resolves significant remaining mortgage-related exposures, is in the best interests of our shareholders, and allows us to continue to focus on the future."
Bank of America has paid out tens of billions of dollars in losses and litigation since it bought Countrywide six years ago. Analysis: Michelle Fleury, BBC New York
Countrywide was the biggest mortgage-lender in the US at the time of the crisis. This is the latest effort by authorities in the US to hold Wall Street accountable for the bad conduct that led to the financial crisis.
And the sums involved in Bank of America's settlement dwarf the $13bn paid by another bank, JP Morgan to resolve a similar matter.
Even though the penalty exceeds Bank of America's entire profits last year, this deal brings a measure of closure.
The bank, one of America's biggest, has already paid tens of billions of dollars to settle cases related to the financial crisis but this was seen as the biggest remaining legal hurdle.