US judge approves $8.5 bn Bank of America settlement
Washington — A US judge has approved an $8.5 billion settlement between Bank of America and a group of investors for losses on dodgy mortgage-backed securities whose collapse triggered the 2008 financial crisis.
Justice Barbara Kapnick of the New York State Supreme Court green-lighted the 2011 accord Friday, rejecting demands to void it by some investors, including insurer AIG, who called it inadequate and alleged conflicts of interest, according to the decision seen by AFP.
Kapnick said the Bank of New York Mellon, representing the defrauded investors, "did not abuse its discretion in entering into the settlement agreement and did not act in bad faith or outside the bounds of reasonable judgment" in negotiating the deal with Bank of America.
Hoping to put its disastrous 2008 purchase of mortgage lender Countrywide Financial behind it, Bank of America said in June 2011 it would pay $8.5 billion to a group of large private investment groups that invested in securities which held poorly documented or substandard home loans from Countrywide.
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