FDIC Seeks $741M From JPMorgan, BofA, Others Over MBS
By Jeff Overley (August 13, 2012, 4:35 PM EDT) -- The Federal Deposit Insurance Corp. on Friday filed five lawsuits in Alabama, New York and California seeking $741 million in damages from Bank of America Corp., JPMorgan Chase & Co. and other major lenders for allegedly duping now-defunct Colonial Bank into buying doomed mortgage-backed securities.
The FDIC is receiver for Alabama-based Colonial. The five complaints, which span roughly 700 pages, make the now-familiar allegation that leading banks took bundles of shaky loans and marketed them as rock-solid securities. The New York suit, for example, alleges Colonial paid $388 million for securities of dubious quality. Offering documents had misleading information about the...
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