New York's attorney general is investigating Bank of America Corp's (NYSE:BAC - News) $8.5 billion settlement with investors over losses in mortgage-backed securities, and has sought data from 20 institutional investors that agreed to the accord.
In letters to the firms, Attorney General Eric Schneiderman requested the names of various clients -- including pension funds, government authorities and charities affiliated with the state -- that invested in securities issued by the 530 mortgage securitization trusts covered in the accord. He also sought the par and current market values of the clients' securities.
Reuters via Yahoo!
This is in relation to Bank of America' acquisition of Countrywide back during the crisis. During the real estate bubble, Countrywide was the nation's largest originator of mortgages. Their CEO, Angelo Mozilo (a.k.a. The Thing) cashed out huge in the months leading up to the collapse, altering his own compensation agreement to make it possible.
After the bubble burst the government / Fed found a buyer for Countrywide, and that buyer was B of A. B of A is attempting to settle the claims investors in Countrywide originated mortgages may have against the wholesale fraud that was epidemic in the industry.
Now the AG of NY is seeking data from the financial firms that settled some of those claims with B of A, trying to determine whether or not any criminal liability ought to attach to these actions.
Hint to the reader: It is extremely unlikely that B of A would part with $8.5B if no one could prove anything. It may not be B of A executives who wind up indicted, but I sure hope Angelo Mozilo winds up enjoying the government's hospitality at the crossbar hotel.