Rare in Crisis-Era Litigation, BofA Cleared to Go to Trial
Last week, in an interview with The Wall Street Journal, Attorney General Eric Holder hinted that the U.S. Department of Justice was close to making charging decisions in numerous crisis-era investigations into large financial companies. “My message is, anybody who’s inflicted damage on our financial markets should not be of the belief that they are out of the woods because of the passage of time,” he said to the publication. “If any individual or if any institution is banking on waiting things out, they have to think again.”
More than five years have passed since the housing market bubble burst, causing a credit crisis and leaving financial institutions stuck with securities that had lost much of their value — and the federal government is still attempting to assign responsibility for the problems that drove the mortgage boom and the subsequent collapse of the housing market.
Thanks to its 2008 acquisition of Countrywide Financial, Bank of America (NYSE:BAC) has been drawn into federal court for years regarding its mortgage business, and while the government’s latest allegation of fraud was made in October, the lawsuit switched into high gear this week, proof of the Justice Department’s ongoing commitment to pursuing litigation with any individual or institution that damaged the U.S. financial markets.