BofA Settles With Investors Over Alleged Fraud Claims

Law360, New York (November 17, 2010, 7:19 PM EST) -- A Bank of America Corp. subsidiary has agreed to pay $100,000 to settle allegations that its broker-dealers pumped up investments in Fannie Mae and Freddie Mac bonds by falsely claiming they were backed by a full guarantee from the U.S. government.

Two Banc of America Investment Services Inc. brokers violated a “plethora” of Bank of America compliance rules to win $2 million in investments in so-called step-up bonds, but were nevertheless applauded by their supervisors, Massachusetts Secretary of the Commonwealth William Galvin said in a consent...
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