Just when readers might have though that the subprime mortgage scandal was over, news of two new federal securities fraud lawsuits is released. The Justice Department and the U.S. Securities and Exchange Commission have filed complaints against Bank of America, alleging fraud in the way it sold residential mortgage-backed securities to investors.
According to the complaints, the residential mortage-backed securities (RMBS) — totaling an estimated $850 million — were marketed and sold to investors under a guise of misleading statements or undisclosed material information. The RMBS also had a higher stated credit quality or valuation than subprime mortgage bonds.
Notably, these are not the first securities fraud allegations against Bank of America. The bank already has agreed to pay more than $45 billion to settle other claims relating to the 2008 financial crash. The bank has denied liability in these new cases. In a press statement, the bank implies that any losses might be investors’ own fault, characterizing them as sophisticated investors who were given access to material data about the securities before their purchases.
A securities fraud attorney may have advice on ways to check the credibility of certain financial professionals and the securities they are recommending. Yet it may not always be possible to know whether brokerage firms and banks are misrepresenting or withholding important information about recommended investments . In such cases, a seasoned securities fraud lawyer should be able to advise victims on strategies for holding financial advisors, banks, and brokerage firms accountable for investment losses.
Source: chicagotribune.com, “U.S. accuses Bank of America of mortgage-backed securities fraud,” David Ingram and Peter Rudegeair, Aug. 6, 2013