Monday, August 01, 2011

BofA 'Piling On' Continues As 15 C-Wide Investors Opt Out Of One Class Action & $624M Settlement, Bring Another Demanding Bankster Cough Up More Cash

Reuters reports:
  • Bank of America Corp was sued by 15 former Countrywide Financial Corp institutional investors who said they lost money after being misled about the mortgage lender's financial condition and lending practices.

  • BlackRock Inc, the California Public Employees' Retirement System (CalPERS), T Rowe Price Group Inc, TIAA-CREF and the other plaintiffs, including some in Europe, sued in Los Angeles federal court, after deciding not to join a $624 million settlement that won court approval in February.(1)

  • These plaintiffs believed they could recover more by suing on their own over the "massive and pervasive" fraud at Countrywide, which Bank of America bought on July 1, 2008.


  • According to the 425-page complaint by the 15 plaintiffs, Countrywide and officials like former Chief Executive Angelo Mozilo abandoned prudent lending, reserved too little for bad loans and inflated earnings, in a drive to triple market share to 30 percent and enrich themselves. [...] The plaintiffs seek unspecified damages and class-action status for the March 12, 2004 to March 7, 2008 period.


  • Bank of America shares have fallen close to 60 percent since it bought Countrywide,(2) roughly three times as much as the KBW Bank Index.

For more, see BofA legal troubles deepen as big investors sue.

See also, Bloomberg: Bank of America Sued by Countrywide Financial Investors Alleging Fraud.

(1) According to Reuters, the February 25 settlement approved by U.S. District Judge Mariana Pfaelzer in Los Angeles called for Bank of America to pay $601.5 million to former Countrywide investors, and set aside $22.5 million for claims of investors that opted out.

(2) See BofA Director On Countrywide: "Worst Decision We Ever Made!" As Bank Settles 'Crappy Mortgage' Suit For $8.5B; Will Swallow Add'l $5.5B In Buybacks for more on Bank of America and its 'brilliant' move in allowing Angelo Mozilo to unload Countrywide on these geniuses and its decision to buy Countrywide.

Editor's Note: Reading about the seemingly continuous pounding BofA is taking by literally everyone (whether it be homeowners victimized by illegal trash-outs suing for thousands, well-heeled investors suing for hundreds of million$, and those in between - everyone seems to get a turn) reminds me of the the old schoolyard game we called 'Johnny-Ride-A-Pony' that we played as kids. For those who know what I'm talking about, BofA reminds me of the team that bends over (with the lead member wrapping his arms around a tree, telephone pole or similar object)), forming the 'horse,' and the members of the other team (the 'jumping' team), after getting a running start, each jumps on the backs of the 'horse' team, one at a time as they accumulate, pounding the living crap out of the 'horse' team until they collapse, causing them all to come crashing down onto the ground.