Court papers filed on Wednesday revealed that Bank of America Corp has entered into an agreement with investors to settle a lawsuit alleging the bank regarding bid-rigging of its municipal bonds. The settlement, said Bloomberg, was part of a litgation that started in March 2008. BofA and other banks were accused of conspiracy in the artificial fixing of prices and market manipulation for the municipal derivatives.
The plaintiffs in the bond-rigging case included Bucks County Water & Sewer Authority in Pennsylvania, the city of Baltimore, and the Central Bucks School District. Bucks County said the activity that the banks had been involved in volated antitrust laws, which caused them to avail lower interest rates than what should have been otherwise in competitive market conditions. According to a filing in the Manhattan district court in the US, attorneys for the plaintiffs dubbed the settlement "significant and of substantial benefit to the class." The legal representatives also added that BofA only incurred less liability as opposed to the others as the US bank had cooperated with the plaintiffs sooner. BofA aided the plaintiffs in filing a misconduct report to the US Department of Justice.
In the Justice Department probe, over a dozen individuals had pleaded guilty of their actions regarding the bond-rigging activity.
The settlement on Wednesday was unopposed by either of the parties, but is subject to approval by the court. Court papers showed that the settlement followed earlier ones like the USD44.6 million settlement by JPMorgan Chase & Co, USD37 million by Wells Fargo & Co and USD6.5 million by Morgan Stanley.The same papers indicated that the banks BofA, JPMorgan, Wells Fargo, General Electric Co and UBS AG had agreed to settle claims brought up by several state attorneys general. As with BofA, the payout of the bank is USD82.5 million, which also includes an earlier settlement, according to court papers.
When asked for comment regarding the settlement, a spokesman for the second-largest US bank refused to provide one.
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