Bank of America (BAC) Agrees to Pay $137M to Settle Muni Cases

December 7, 2010 1:49 PM EST
Bank of America Corp. (NYSE: BAC) will reportedly pay $137 million to settle the investigations surrounding the firm's involvement in rig bids on 88 municipal bond contracts, according to the Securities and Exchange Commission and the Justice Department.

The Charlotte, N.C.-based bank will pay $36 million to settle a case with the SEC and an additional $101 million to other federal and state agencies to resolve various investigations.

“Bank of America is pleased to put this matter behind it and has already voluntarily undertaken numerous remediation efforts,” the company said in a statement.

The Justice Department said that the cooperation from BofA has led to an ongoing investigation into the anticompetitive activity in the municipal bond derivatives industry.

The SEC reported that it found the bidding process for munis was not competitive due to the lack of key information and the fair market value of the reinvestment instruments not being established. The bidding agents involved funneled business from municipalities to Bank of America to help the firm win the bid.

Shares of Bank of America are up 2 cents to $11.66 in midday market movement on Tuesday.

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