SEC and DOJ File Parallel Civil Suits Alleging BofA Defrauded RMBS Investors

Orrick - Finance 20/20
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On August 6, the SEC and the U.S. Department of Justice filed parallel civil suits against several Bank of America affiliates, alleging that the bank defrauded investors in connection with its packaging and sale of US$850 million in RMBS. The actions, both filed in the Western District of North Carolina, allege that BofA misled investors by failing to disclose information concerning the quality of the loans backing the RMBS, including their origination channel, misrepresenting compliance with underwriting guidelines, and making other false statements in loan tapes and free writing prospectuses filed with the SEC. The SEC sued BofA for alleged violations of Sections 17(a)(2), 17(a)(3), and 5(b)(1) of the Securities Act of 1933. SEC Complaint. The DOJ sued BofA for alleged violations of Sections 1001 and 1014 of the Financial Institutions Reform, Recovery and Enforcement Act of 1989. DOJ Complaint.

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