New York, NY: Bank of America has reached a settlement in the pending securities fraud class action lawsuit brought by investors who purchased mortgage investments from Countrywide Financial. BoFA acquired Countrywide in 2008.
The proposed settlement would see BoFA pay $500 million to settle the lawsuit, which would be paid out to plaintiffs that include Dubai's Mashreq Bank and public and union pension funds in California, Maine, Nevada, Vermont and Washington states. The plaintiffs claimed they were misled about the risks of securities they bought from California-based Countrywide between 2005 and 2007.
The settlement surpasses the $315 million accord reached with Merrill Lynch in May 2012, making it the largest to resolve federal class-action litigation over mortgage-backed securities since the financial crisis began.
The accord requires court approval.