2.04.2010

Italy Seizes Bank of America Assets

If we're not going to hold Bank of America (and the other "too big to fail" banks) responsible, it' at least heartening good to see other countries do it themselves.

Via Bloomberg (h/t DKos' Badabing):

Feb. 3 (Bloomberg) -- Italy’s financial police are seizing 73.3 million euros ($102 million) of assets from Bank of America Corp. and a unit of Dexia SA as part of a probe into an alleged derivatives fraud in the region of Apulia.

Police are investigating losses on derivatives linked to the sale of 870 million euros of bonds sold by the regional government in 2003 and 2004, according to an e-mail from the prosecutor’s office in Bari today. The banks misled the municipality, located in the heel of Italy, on the economic advantages of the transaction and concealed their fees, the prosecutor said.

The region, also known as Puglia, joins more than 519 Italian municipalities that face 990 million euros in derivatives losses, according to data compiled by the Bank of Italy. In Milan, prosecutors seized assets from four banks including JPMorgan Chase & Co. and UBS AG in April and requested they stand trial for alleged fraud. Hearings started this month.

“Italy, like other countries, is full of these examples,” said Dario Loiacono, a banking lawyer in Milan who isn’t involved in the case. “It’s the result of the unavoidable asymmetry of information between the banks and the municipal borrowers.”

Police are sequestering a further 30 million euros that the municipality was set to place in a fund managed by the banks on Feb. 6, the prosecutor said. The magistrate also asked that Charlotte, North Carolina-based Bank of America be stopped from doing business with Italian municipalities for two years. A hearing is slated for next month.

read more...
Maybe news like this had a little something to do with it?

Via Bloomberg:

Feb. 3 (Bloomberg) -- Bank of America Corp., the nation’s largest lender, will pay investment-banking employees bonuses of about $4.4 billion for last year, or an average of $400,000 each, a person close to the bank said.

As much as 95 percent will be paid in stock vesting over about three years, the person said. Those receiving the smallest bonuses will get about half their compensation in cash, paid later this month, the person said. The unit accounts for 10,000 people, or 4 percent of the bank’s 283,000 workers.

Bank of America, the target of political wrath for its acquisition of Merrill Lynch & Co. even as the faltering Wall Street firm handed out $3.6 billion of employee bonuses, reaped a $6.3 billion profit in 2009. This year’s investment bank bonuses are a third less the than $6.5 billion that the combined units would have paid in the peak year of 2006, the person said, citing internal Bank of America calculations.


Bookmark and Share

blog comments powered by Disqus