New York (AFP) – Nearly $ 17 billion Bank of America agreed Thursday to pay a historic amount to terminate proceedings in the United States related to “subprime” mortgages at risk to origin of the financial crisis.
The amicable agreement between the American bank and the Department of Justice, of American States and several regulators, which deals specifically with 16.65 billion dollars, is ” the largest commercial agreement in history with a sole proprietorship “and covers” pipes uncovered in more than a dozen cases and investigations, “said the Minister of Justice, Eric Holder.
At a press conference in Washington, he spoke of “a historic step forward in our efforts to protect the American people from financial fraud, and to hold accountable those whose actions threatened the integrity of our financial markets and undermined the stability of our economy. “
American authorities accused Bank of America marketing before the financial crisis of 2008 complex investments backed by subprime mortgage but presented as investments safe. They ultimately generated billions of dollars in losses for those who bought them.
“It’s a bit like going to the corner store to buy fresh milk, and discover that employees store knew he had been left outside on a loading platform, unrefrigerated, all day the day before, but have you ever said, “said another official of DoJ, Tony West.
Bank of America argued that the charges were essentially held in its subsidiaries Countrywide and Merrill Lynch, before she buys them. The agreement, which puts an end to major uncertainties in real estate loans, “is in the best interest of our shareholders, and allows us to keep our focus on the future,” said its chief executive, Brian Moynihan .
This analysis seemed shared the New York Stock Exchange where BofA Action took 1.64% to 15.77 dollars at 1500 GMT
-. Possible lawsuits against individuals –
Joe Morford, an analyst with RBC Capital Markets, noted in a footnote that the agreement is more expensive than initially anticipated, but that it “removes a large sword of Damocles above the title and paves the way for the soon return to normal “for bank profits.
In detail, BofA will pay a total of $ 9.65 billion in fines to the Department of Justice (which s ‘wins the lion’s share: 5000000000), 6 American states that had initiated investigations (California, Delaware, Illinois, Kentucky, Maryland and New York), as well as fellow policeman (SEC) and the agency guarantee of bank deposits (FDIC).
will be supplemented measures valued at approximately $ 7 billion and expected to provide compensation to consumers. Bank of America has agreed to renegotiate including mortgages for troubled borrowers, or to help build affordable housing for rent.
independent monitor will also be appointed to verify the proper implementation of the agreement.
This will cause the bank by a pretax charge of $ 5.3 billion in its third quarter accounts. But he will also escape from civil lawsuits in a series of government agencies and regulators.
However, it has had to admit its responsibility, and the agreement does not rule out potential criminal proceedings or complaints against individuals.
American media in particular evoke prosecution against Angelo Mozilo in preparation, co-founder of Countrywide. This financial institution has become a symbol of the excesses of the financial sector for selling thousands of loans to insolvent households.
The record for the most expensive individual settlement agreements in banking sector United States was held so far by JPMorgan Chase, which agreed in November to pay $ 13 billion to avoid prosecution in a case also linked to subprime loans.
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