Appeals Court Throws Out $1.27 Billion Penalty Against Bank of America
24 May 2016 - 2:40AM
Dow Jones News
A federal appeals court on Monday reversed a lower court order
that Bank of America Corp. pay a $1.27 billion penalty in
connection with mortgages sold by its Countrywide unit., a major
blow to the government which had won the high-profile financial
crisis case at trial.
The U.S. Court of Appeals for the Second Circuit said it agreed
with the bank, which argued the government didn't provide
sufficient proof at trial.
The "Hustle" case revolves around a civil lawsuit that the
Manhattan U.S. attorney's office filed against Bank of America in
2012. It alleged that a precrisis Countrywide Financial Corp.
program called Hustle had churned out shoddy mortgages with a focus
on quantity, not quality, and then misrepresented those loans when
selling them to Fannie Mae and Freddie Mac, which had to be propped
up by government money in the financial crisis.
A jury found Bank of America liable for fraud in the case in
2013.
Write to Aruna Viswanatha at Aruna.Viswanatha@wsj.com
(END) Dow Jones Newswires
May 23, 2016 12:25 ET (16:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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