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Bank Of America Sued By SEC For Muni Securities Fraud, Settles For $137 Million

Tyler Durden's picture


With everyone focused on whether or not the Build America Bond program will be extended (it appears it won't, and is the main reason for the market weakness today), after rumors earlier that the program may not be part of the negotiated extension (and why not? It's not like republicans are suddenly pretending to be fiscally prudent, after pushing the latest addition to the welfare state that will cost $5 trillion in future debt) we now learn that pathological nest of infinite criminality better known as Bank of America has again settled a new SEC fraud charge, this time relating to its municipal securities program. According to Reuters headlines, the SEC has sued Bank of America Securities with fraud in connection with allegations of improper bidding practices involving municipal securities. But heaven forbid the SEC would settle on anything more than a, well, settlement: just as the charge was announced, so was the settlement, and we learn that BofA has agreed to pay more than $36MM in disgorgement, and that is and affiliates to pay another $101MM to Federal and state authorities. SEC wristslap... and the bank can go bank to stealing.

And while we go back to pretending we have a market regulator, here is the latest on the BAB situation from the WSJ:

Extension of the Build America Bonds program isn't included in a wide-ranging tax agreement between President Barack Obama and Republican congressional leaders, Senate aides said.

The Build America Bonds program provides federal subsidies for taxable bonds issued by state and local governments. It is set to expire Dec. 31, but won't be part of a broad outline agreement to extend expiring income tax breaks that Mr. Obama announced Monday evening, according to senior Democrat and Republican aides.

It is possible the bond program could be added in subsequent negotiations as the tax package is finalized, but that is unlikely due to Republican opposition.

Build America Bonds came to the market in the spring of 2009, aiming to provide state and local governments with a lower-cost way to finance capital projects. More than $150 billion of the bonds have been issued to help finance projects including upgrades to Alaskan airports and to school, water, sewer and electric facilities across the country.

In other words, Bernanke's monetization of all municipal bonds is now just around the corner.


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Tue, 12/07/2010 - 13:34 | Link to Comment azengrcat
azengrcat's picture

They paid their protection dues fair and square!

Tue, 12/07/2010 - 14:58 | Link to Comment SWRichmond
SWRichmond's picture

...and paid them from a taxpayer-provided slush fund, no less!  Justice, baby!

Tue, 12/07/2010 - 13:34 | Link to Comment SheepDog-One
SheepDog-One's picture

Americans will never do anything to stop it, so the tyranny will march on.

Tue, 12/07/2010 - 13:35 | Link to Comment Jim in MN
Jim in MN's picture

Hey, SEC, read this!!!

Prison time for bank officers.  It's the only way they'll understand that systemic corruption is a threat to the USA's vital national security interests.

Where's that 'not 2Big2Jail' graphic again....

Tue, 12/07/2010 - 13:47 | Link to Comment Rhodin
Rhodin's picture

So true, this won't stop until those responsible are charged as individuals.....or the system collapses.  My guess is collapse, would be nice to know WHEN though!

Tue, 12/07/2010 - 13:51 | Link to Comment Cdad
Cdad's picture

Correct.  And no matter how terrible the recession that might follow the collapse of BofA...and then hopefully of JP Morgan, the nation would ultimately be better off for the death of this bank.

The SEC continues to show itself to be entirely corrupt, or incompetent, or both.  They simply do not understand the nature of the crime...despite endless amounts of evidence at hand.

Tue, 12/07/2010 - 13:58 | Link to Comment Denninger-is-a-...
Denninger-is-a-douche's picture

System collapse.  Everyone is jerking off for a system collapse...

Tue, 12/07/2010 - 20:43 | Link to Comment gkm
gkm's picture

What do you mean responsible?  They admitted and denied nothing.  How can they be responsible?

They used money that was created for them by the government to pay off the government.  So not only did they not do anything wrong, they paid nothing back in essence.  Too funny.

Wed, 12/08/2010 - 02:40 | Link to Comment StychoKiller
StychoKiller's picture

I had a dream yesterday that we have until New Year's Eve, then there will be an oil fire in Iraq, bringing down the empire. FWIW.

Tue, 12/07/2010 - 13:36 | Link to Comment Ripped Chunk
Ripped Chunk's picture

That was over quick

Tue, 12/07/2010 - 14:09 | Link to Comment Mark Medinnus
Mark Medinnus's picture

...but did you like it?

Tue, 12/07/2010 - 15:07 | Link to Comment Ripped Chunk
Ripped Chunk's picture

No I didn't. No perp. walk, no jail time, no accountability.

Tue, 12/07/2010 - 13:45 | Link to Comment Dick Darlington
Dick Darlington's picture

This is how billions are made. Commit crimes, make billions with fraud, never admit or deny any charges, throw some change on the dirty face of the "regulator" to settle and go home. Rinse and repeat.

Tue, 12/07/2010 - 14:33 | Link to Comment Fearless Rick
Fearless Rick's picture

I was thinking the exact same thing. Thanks. Why increase taxes when we can allow banks to commit crimes, sue and settle for cash?

Sure beat prosecuting and possibly losing.

Tue, 12/07/2010 - 13:46 | Link to Comment buzzsaw99
buzzsaw99's picture

So much porn, so little time.

Tue, 12/07/2010 - 13:48 | Link to Comment LongSoupLine
LongSoupLine's picture

fuking disgusting!  This sht country's govt can f-off!

Tue, 12/07/2010 - 13:51 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

The beat goes on.

Tue, 12/07/2010 - 13:51 | Link to Comment damnitalready
damnitalready's picture

I'm going to incorporate.  Then go rob the local 7-11, admit no wrong doing, and pay a % of my take as a "fine"... 

Tue, 12/07/2010 - 13:57 | Link to Comment Traianus Augustus
Traianus Augustus's picture

Oh boy, someone is going to get a smaller bonus now!!!!

Tue, 12/07/2010 - 14:04 | Link to Comment erik
erik's picture

Muni bonds are getting crushed today.  MUB down 1.3%.

I'm sure the Republicrats will find a way to get the Build America Bond program back on the docket.  After all, it accomplishes the primary objectives of increasing spending and worsening the US debt situation.

Tue, 12/07/2010 - 13:59 | Link to Comment Cleanclog
Cleanclog's picture

Whack a mole.  Bank fraud popping up all over the place, with fines that are nowhere near the profits pocketed by the perps.  F-ing frustrating, but same as it ever was over time.

Tue, 12/07/2010 - 14:06 | Link to Comment f16hoser
f16hoser's picture

BAC had 137 million laying around in the back of an old desk drawer. CMON, 137 million????? Holder and Mary S. probably get half of it........



Tue, 12/07/2010 - 14:09 | Link to Comment Cdad
Cdad's picture

Attorneys of the States instrumental in the settlement, of course.  Banks steal from citizens, gov't takes its cut, bank goes on with systemically fraudulent practices.

Capital will not form again in these obviously criminal syndicate banks.  Wall Street knows this.  All we need now is for the printing presses to be turned off, and justice will arrive like the wind.

Tue, 12/07/2010 - 14:09 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

"Build America Bond"



Tue, 12/07/2010 - 14:18 | Link to Comment Greater Fool
Greater Fool's picture

Fine: 137 million style points. Please be less obvious about bribery of public officials in future. Perhaps consult K Street for a few pointers? Thanks, Your Friendly Neighborhood SEC

Tue, 12/07/2010 - 14:52 | Link to Comment johngaltfla
johngaltfla's picture

Wrist, meet slap.

Tue, 12/07/2010 - 16:41 | Link to Comment snakeboat
snakeboat's picture

So, what is that, like .005% of their muni deal profits over the past decade??



Tue, 12/07/2010 - 17:09 | Link to Comment mudduck
mudduck's picture

They lobbied to get the right to make unlimited political donations like any other citizen, how about 3 strikes rule like any other citizen. What a disgusting pathetic joke. 

Tue, 12/07/2010 - 19:46 | Link to Comment Bow Tie
Bow Tie's picture

chump change.

Tue, 12/07/2010 - 23:13 | Link to Comment jomama
jomama's picture

why wouldn't they settle?

it's not like it's their money anyway.

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