Tags: BofA’s Countrywide | Banks Sued Over Pension Losses

BofA’s Countrywide, Banks Sued Over Pension Losses

Friday, 28 Jan 2011 02:34 PM

Bank of America Corp.’s Countrywide Financial unit was sued by the state of Michigan, which joined Oregon in seeking to recover pension-fund losses from the mortgage lender.

Countrywide made “false and misleading” statements about its underwriting standards, Michigan Attorney General Bill Schuette said today in a statement. The state seeks to recover $65 million in losses from investments in Countrywide securities.

“Countrywide’s stock was artificially inflated during the class period because defendants made these false and misleading statements, which concealed their fundamental shift in core mortgage-related business strategy,” Schuette’s office said in the statement.

Michigan’s lawsuit, filed in federal court in California, joins similar lawsuits filed by Oregon and California’s Fresno County Employees’ Retirement Association. The three said they opted out of a class-action suit against Countrywide, which was acquired by Charlotte, North Carolina-based Bank of America in 2008.

Oregon sued to recover $14 million in losses to state pension and workers’ compensation funds, Attorney General John Kroger said in a Jan. 26 statement. A settlement in the class- action would have provided the state less than $500,000, his office said.

Bank’s Response

“It is unfortunate that select investors chose to opt out of a fair and equitable agreement to settle these issues,” Shirley Norton, a Bank of America spokeswoman, said in an e- mail. “We intend to vigorously defend these claims.”

The Michigan and Fresno lawsuits, filed Jan. 26, also name as defendants banks that acted as underwriters for notes issued by Countrywide, including units of Citigroup Inc., JP Morgan Chase & Co., Barclays Plc, and Deutsche Bank AG.

Mark Lane, a spokesmen for Barclays, and Jennifer Zuccarelli, a JPMorgan spokeswoman, declined to comment. Spokesmen for Citigroup and Deutsche Bank didn’t immediately return calls seeking comment.

The case is State Treasurer of the State of Michigan v. Countrywide Financial Corp., 2:11-cv-00809, U.S. District Court, Central District of California.

© Copyright 2015 Bloomberg News. All rights reserved.

1Like our page

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved