May 24, 2016
A federal appeals court in Manhattan has ruled that Bank of America Corp. was not liable for fraud nor would it be subject to a penalty of more than $1.2 billion for what it did before the economy collapsed in 2008. A jury had previously ruled differently.
The appeals court said there wasn’t sufficient evidence for a jury to conclude at a 2013 trial that mail and wire fraud was committed by the Charlotte, N.C.-based bank’s Countrywide Financial unit in 2007 and 2008. The appeals court said the government had to prove there was fraudulent intent when the bank set up contracts.
Prosecutors had argued that the bank passed along mortgages to government housing agencies Fannie Mae and Freddie Mac without proper reviews, and contributed to one of the nation’s worst financial recessions.