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Bank of America to pay $8.5 billion in settlement

by Jorge Hernandez on June 29, 2011

Bank of America, one of the "most hated companies in the U.S.", according to the Business Insider, will have to pay $8.5 billion in settlement money to mortgage bond investors who were hurt by the financial crisis.

The plaintiff's included BlackRock, the Federal Reserve Bank of New York and the Pacific Investment Management Company, according to the New York Times. Kathy Patrick, a litigator from Houston, oversaw the case for the mortgage bond investors.

Bank of America was accused of misrepresenting the quality of the mortgage bonds they were selling.

Patrick has represented clients suing big banks before. She won a settlement of about $550 million against Goldman Sachs and UBS. She also worked for the Huntsman Corporation, which sued Deutsche Bank and Credit Suisse. That case ended in a settlement worth $1.73 billion.

According to Bank of America, chief executive Brian T. Moynihan is quoted as saying, "This is another important step we are taking in the interest of our shareholders to minimize the impact of future economic uncertainty and put legacy issues behind us. We will continue to act aggressively, and in the best interest of our shareholders, to clean up the mortgage issues largely stemming from our purchase of Countrywide." 

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