Rakoff Takes Broad View Of Bank Fraud Law In $1B BofA Suit
By Dietrich Knauth
Law360, New York (August 19, 2013, 8:19 PM ET) -- U.S. District Judge Jed Rakoff on Monday explained his decision not to dismiss a $1 billion mortgage fraud suit against Bank of America, saying that plain language of the Financial Institutions Reform Recovery Enforcement Act allows civil prosecutors to go after “self-affecting” fraud at federally insured financial institutions.
FIRREA, passed in the wake of the 1980s savings-and-loan crisis, allows civil prosecutors to sue entities that negatively “affect” the stability of federally insured banks. Prosecutors, now backed by Rakoff's opinion, have launched several suits in recent years...