Parallel Government Actions Against Bank of America May Proceed

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On June 19, Judge Max O. Cogburn, Jr. of the Western District of North Carolina issued Orders in two parallel actions by the DOJ and SEC against Bank of America, previously covered in the August 12, 2013 and April 7, 2014 issues. In the action brought by the DOJ, Defendants moved to dismiss on the ground that the government failed to adequately plead that Defendants violated Sections 1001 and 1014 of the Financial Institutions Reform, Recovery and Investment Act of 1989 (FIRREA). Declining to follow the Magistrate Judge’s recommendation that the case be dismissed, Judge Cogburn granted the government’s motion for leave to amend both of its claims, rendering the motion to dismiss moot. Among other things, the court held that a Section 1014 claim may be adequately pleaded by alleging false statements that influenced a covered institution’s decision to purchase RMBS securities, in addition to loans. In the action brought by the SEC, Judge Cogburn denied Defendants’ motion to dismiss without prejudice, adopting the Magistrate Judge’s finding that the violations of sections 17(a)(2), 17(a)(3) and 5(b)(1) of the Securities Act of 1933 were pleaded with sufficient particularity. However, the Order made clear that Defendants were not precluded from moving for summary judgment on the sufficiency of the evidence against them. DOJ v. BofA Order. SEC v. BofA Order.

Topics:  Bank of America, Banks, DOJ, Enforcement, Enforcement Actions, FIRREA, Parallel Claims, SEC

Published In: Business Torts Updates, Civil Procedure Updates, Constitutional Law Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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