BofA Settles Municipal Fraud Case For $137 Million
Bank of America has agreed to pay $137 million to settle allegations that it defrauded state and local governments in 20 states. When local governments issue bond offerings, they often invest the money until they need it for whatever they're planning to build. Banks are supposed to bid competitively for that business, but according to the SEC settlement, Bank of America rigged the process to ensure it got the business. As a result, school districts, colleges and development authorities across the country paid rates that were too high or received returns that were too low. "This really reaches into Main Street. It reaches into every household in America because we're all paying for debts that communities have issued," says Jim Cox, a professor of financial regulation at Duke University Law School. About $3.4 million of the $137 million settlement will come to North Carolina. Attorney General Roy Cooper says agencies in Buncombe, Guilford, Mecklenburg, Wake and New Hanover counties will get a share. The North Carolina Housing Finance Agency, NC State and the University of North Carolina System will also get money from the settlement. Charlotte Country Day School will also get a check for about $72,000. The SEC says that amount represents Bank of America's ill-gotten gains from the school. The SEC says Bank of America will not face any civil penalties because it cooperated with the investigation and even reported the wrongdoing.