Seeking Alpha

NYT: BofA blinks in DOJ settlement talks

  • Bank of America (BAC -0.5%) had previously offered $13B, with just $4B of that in cash, to financial crisis-era mortgage issues with the U.S., but the NYT says the bank has upped its offer to $14B, and the cash portion to $7B.
  • The DOJ however, wants $17B, has rejected the offer, and has threatened a lawsuit within days if a deal doesn't come.
  • Underscoring why no bank wants to see the inside of a courtroom on this, yesterday a judge ordered BofA to pay nearly $1.3B in another federal mortgage case.
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Comments (57)
  • funfun
    , contributor
    Comments (2670) | Send Message
     
    The last thing CEO Brian Moynihan and his army of lawyers wants to see is active and erstwhile Bank of America bosses and under-bosses marching up the courtroom steps and forced to testify under oath about the slimy details of this massive fraud and colossal scandal! Look for a settlement, not unlikely circa $15.5 to $17 billion.

     

    …funfun..
    31 Jul, 10:09 AM Reply Like
  • Wow72
    , contributor
    Comments (516) | Send Message
     
    Wrongwrong,

     

    Send the National Guard to Chiraq!
    1 Aug, 06:12 AM Reply Like
  • funfun
    , contributor
    Comments (2670) | Send Message
     
    Long-suffering BAC shareholders are finding the deliberate business strategy of fraud-monering by Bank of America executives and Managers in the 21st century has a monumental price tag:

     

    $60 billion in litigation charges, fines and settlements to date, with another $15 billion or more very likely on the way. What a bar tab for drunken dishonesty and cheating!

     

    …funfun..
    31 Jul, 10:15 AM Reply Like
  • Noquiche
    , contributor
    Comments (222) | Send Message
     
    You should use cut and paste to avoid future grammar errors.
    31 Jul, 11:29 AM Reply Like
  • funfun
    , contributor
    Comments (2670) | Send Message
     
    EDITORIAL Correction for typo in first sentence:

     

    Substitute...

     

    "...deliberate business strategy of fraud-mongering…"

     

    …funfun..
    31 Jul, 12:19 PM Reply Like
  • Seanebr
    , contributor
    Comments (132) | Send Message
     
    He already does. Just cuts and pastes the same paragraph in every thread. I never spend more than 2 seconds glancing over them, but they usually contain the same tired old rants. Something about fraud and Enron ethics bla...bla...bla...
    31 Jul, 01:54 PM Reply Like
  • Haywood Jablome
    , contributor
    Comments (83) | Send Message
     
    I bought the bank at a 30% discount to book value so I'm happy loselose!
    31 Jul, 02:26 PM Reply Like
  • drgrier
    , contributor
    Comments (234) | Send Message
     
    Why bother, it still is as meaningless and boring as before. You really need to "get a life". JMHO...
    1 Aug, 05:12 PM Reply Like
  • funfun
    , contributor
    Comments (2670) | Send Message
     
    In the meantime, folks, the starry-eyed Moynihan lovers and cheerleaders for his Management team try frantically to distract your attention from the critical issues confronting this intractably troubled financial conglomerate with all manner of silly personal insults and unprofessional smears. Speaks volumes on the ethical destitution in this organisation. That cannot possibly be good for long-suffering BAC shareholders, can it?

     

    Today, the stock decisively pierces 15 on the downside. All the rah-rahs over the internet from ecstatic fans cannot seem to keep BAC shares intact and driving upward.

     

    …funfun..
    1 Aug, 06:20 PM Reply Like
  • madison62
    , contributor
    Comment (1) | Send Message
     
    Countrywide is the villan not BOA
    31 Jul, 10:17 AM Reply Like
  • funfun
    , contributor
    Comments (2670) | Send Message
     
    Bank of America Countrywide is Bank of America. The Bank of America leadership team, which included current CEO Brian Moynihan, enthusiastically preyed after and acquired Countrywide because the megalomanic Management of the Bank wanted to brag about being the biggest mortgage operator in the entire country. No one forced Countrywide on this ethically broken-down Bank.

     

    …funfun..
    31 Jul, 10:21 AM Reply Like
  • groygroy
    , contributor
    Comments (373) | Send Message
     
    funfun, that does not change the fact that Countrywide committed the fraud before they were part of BoA. BoA bought them at the request of the feds. True, they didn't do it out of the goodness of their hearts, but, if they hadn't, all those mortgages and accounts would have ended up in a bankruptcy settlement.
    31 Jul, 10:46 AM Reply Like
  • Seanebr
    , contributor
    Comments (132) | Send Message
     
    Bank of America was a PERFECTLY HEALTHY, LAW-ABIDING BANK before the Federal government FORCED it to purchase the gigantic boiler-room that was Countrywide. In fact, they financed the purchase with "bail-out" money borrowed from the Fed.

     

    They had no choice but to comply or get the fed - the hand that feeds them - on their bad side. Anybody would have done the same in the situation...
    31 Jul, 02:15 PM Reply Like
  • healthpicker
    , contributor
    Comments (1026) | Send Message
     
    Nobody forced BAC to buy CFC. ML is a different story.
    31 Jul, 02:31 PM Reply Like
  • samithree
    , contributor
    Comments (35) | Send Message
     
    Dear funfun,

     

    Why do you throw stones at Mr. Moynihan and never mention Ken Lewis? Mr. Lewis's own employees were concerned about his designs on CountryWide and in fact - his ego driven acquisition spree. I had friends who were on several of the acquisition due diligence teams - so I had an insider's account after-the-fact.

     

    Mr. Moynihan was not even in the decision making picture - so he was never mentioned. I think you twist facts to suit your own rhetoric or just need to revisit the time line of BAC management.

     

    You are correct that the fines paid out by BAC hurt as I am a long time stock holder. That money rightly belonged to stockholders. So why does that give you such I told-you-so joy?
    31 Jul, 10:47 AM Reply Like
  • healthpicker
    , contributor
    Comments (1026) | Send Message
     
    sam, I have been telling funfun this for quite a while. The problem is the truth doesn't fit with funfun's continuous tirade against Moynihan. So he simply ignores the truth.
    I think you can also confirm that CFC purchase was down to Lewis and there was no government pressure put on BAC.
    Now with ML at the end there was a lot of government pressure.
    31 Jul, 02:38 PM Reply Like
  • Doctor Who
    , contributor
    Comments (275) | Send Message
     
    The only reasons this is happening is because we have the most progressive executive branch in history. Banks did Feds a favor. And this is the thanks they get. Takes two to dance. Banks half at fault and consumers who bought homes half at fault. Someone please tell me how it helps obama to tell that real truth. He is too busy enabling people to improve odds they will vote for dems.
    31 Jul, 10:48 AM Reply Like
  • WZT
    , contributor
    Comments (29) | Send Message
     
    Well said Doc!
    31 Jul, 11:27 AM Reply Like
  • Hello Again 83
    , contributor
    Comments (466) | Send Message
     
    BAC needs to take it to trial. The best defense is a good offense!
    31 Jul, 11:28 AM Reply Like
  • drgrier
    , contributor
    Comments (234) | Send Message
     
    IMHO, one should view this in terms of Men's Egos and Power.

     

    BAC's current problems are a direst result of Ken Lewis's EGO when he had the power to act in accordance with it.

     

    Today BAC's fate is controlled by the Ego's of the DOJ's Holder and Snow. There is NO consideration of Justice or what is in this best interest of the nation.

     

    What is not being considered here at this time is the Current Value of all those "bad" securities today as the Real Estate Market has recovered. Essentially the Banks are being leld responsible for a "bad" real estate market of several years ago.

     

    The bank's defense and penalities should be based on "damages" as of today and not those which would have recovered if held "Long Term" This was a problem that resulted from "mark to market" of securities today which should have been Long Term Investments. And the "market" for these securities were a result of the DEMAND for them at the time.

     

    The current litigation is very Mis-Directed. It would take a long drawn out litigation process, battle, to get it "right". So that will never happen. Today there is No Justice, rather Extortion.
    31 Jul, 11:46 AM Reply Like
  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    Countrywide & Merrill - Would be nice if these articles would break the settlement talks down between the two. Doesn't really make a difference to BAC shareholders but it kind of does in terms of history.
    31 Jul, 11:50 AM Reply Like
  • Seanebr
    , contributor
    Comments (132) | Send Message
     
    JeffreyLangBoyd -

     

    Here's the negotiation script for you summarized: DOJ wants $17B, most of it in cash because they get a percentage of all cash settlements for their own department. BAC has made several reasonable counter-offers, but DOJ is still standing firm at $17B. This means they never came to negotiate in the first place. Just trying to make it look like they did before going to trial so they look less corrupt than they actually are...
    31 Jul, 02:11 PM Reply Like
  • healthpicker
    , contributor
    Comments (1026) | Send Message
     
    Jeff, I think this is very relevant. My read is that the ML portion of the settlement is the main area of dispute.
    As most people know the ML RMBS was issued prior to the takeover. There is very clear evidence (from Lewis) that threats were made to Lewis and the BOD if they backed out of the deal. We all know that there were a lot of relevant facts on the state of ML that didn't reach the shareholders. If there had been full disclosure then the shareholders would have rejected the deal. Government (through Poulson) have a lot to answer for in this regard.
    I would like to see the case go to court just to see Poulson testify.
    31 Jul, 02:47 PM Reply Like
  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    Yea I've read that too. I think most of the Countrywide settlement will be "soft" money, whatever that is, if the government has any interest in being fair.
    31 Jul, 03:32 PM Reply Like
  • drgrier
    , contributor
    Comments (234) | Send Message
     
    If he was smart he would plead the 5th ammendment to avoid self incrimmation. He essentially "Ordered the Banks to do as they did". This was a case where a bueacrat had entirely too much Power and absolutely NO accountability for his Actions....
    1 Aug, 05:17 PM Reply Like
  • healthpicker
    , contributor
    Comments (1026) | Send Message
     
    Dr, that is exactly what I expect Paulson to do - if it ever gets that far.
    2 Aug, 02:42 PM Reply Like
  • bill coker
    , contributor
    Comments (11) | Send Message
     
    The comments about BAC being forced to buy Countrywide are becoming tiresome. For once I have to admit that I agree with Fun Fun on this issue. Countrywide was acquired by Ken Lewis . The hubris shown by this man begs disbelief. But I would like to ask any contributor to show evidence that I am wrong. The blame lies with one man and his team. ML was pushed on them by the government but not CW? Another thing that needs to be addressed are those who continue to believe that BAC should distance themselves from CW by putting them into bankruptcy . Please.....don't you think that with the team of legal minds that advise BAC that if that were possible it would have been done... These are two issues that have been discussed ad nauseum .
    31 Jul, 12:07 PM Reply Like
  • Hello Again 83
    , contributor
    Comments (466) | Send Message
     
    BAC saved the tax payer from Countrywide and gets no credit for that turning that part around. BAC needs to take it to trial.
    31 Jul, 12:15 PM Reply Like
  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    I don't think putting CW into bankruptcy is totally off the table. When they were fighting with MBI it was tougher because the judge ruled New York law applied. They still have that judge in the Ambac case which is on-going but the big fear was that they would be overwhelmed with put-backs in New York. They've done a lot of things to put that risk down but the cost of taking care of those issues have involved so much money that one could reasonably say paying off some more is not worth the risk of putting CW into bankruptcy.

     

    Maybe $17 billion in cash is enough to take that risk? That is one of the reasons why I want to know what the Merrill portion of the amount is. It might make that path more appealing.

     

    Ultimately though you can't fight the government who can use the threat of shutting you down. Andersen wound up winning their case (Enron related) and look what it got them.
    31 Jul, 02:04 PM Reply Like
  • Hello Again 83
    , contributor
    Comments (466) | Send Message
     
    I agree with all of that accept the part about you cant fight the government. Yes you can and you can win. BAC has the evidence so use it. Fight the DOJ tooth and nail.
    31 Jul, 02:08 PM Reply Like
  • samithree
    , contributor
    Comments (35) | Send Message
     
    Bill - I agree with you that CW was a BAC self-inflicted wound brought about by Ken Lewis and his Board.

     

    As to CountryWide and bankruptcy - I would like to hear Mr. Moynihan and his legal team address why or why not this was a viable strategy. And if a viable strategy - why they opted not to take it.
    31 Jul, 02:38 PM Reply Like
  • healthpicker
    , contributor
    Comments (1026) | Send Message
     
    bill, agreed. The only dispute I have with funfun on this is that he blames Moynihan for the CFC deal instead of Lewis.

     

    The threat to bankrupt CFC came up as a negotiation bluff in the $8.5B BONY settlement (we are still waiting for the final result of the Section 77 hearing but it looks almost done to me).

     

    As you say if it was a viable thing to do it would have been done already.
    31 Jul, 02:52 PM Reply Like
  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    They already said why they didn't. They were concerned that under New York law they would be deemed to be "successors" to old Countrywide as they purchased many of its assets. It was questionable that it did indeed apply but I think that is the way Judge Bransten likely would have ruled and that ruling even if later overturned might have killed BAC at that point in time.

     

    Now I'm not so sure. They might be able to do a bankruptcy but if the government revoked their banking licenses because of the indictment they'd be dead so I don't see how they can fight.
    31 Jul, 03:28 PM Reply Like
  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    Would be fun to watch but it is very hard to do as there just aren't the protections in place as for example when you sue the IRS. The govt. can kill them whenever they want just like they killed Andersen.
    31 Jul, 03:30 PM Reply Like
  • Seanebr
    , contributor
    Comments (132) | Send Message
     
    If the government didn't have anything to do with BAC's purchase of CW - as many on this thread claim without any logic or fact to back it up - then why didn't BAC just put it through bankruptcy? Wouldn't you have? Moynihan has a corporate law background. I think he's smart enough to have thoroughly explored that option...
    31 Jul, 11:55 PM Reply Like
  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    They did set it up to be "bankruptcy remote" as the term is used. The problem is that issues are rarely 100% clear and one sometimes takes risks such as purchasing many of Countrywide's operating assets from the Countrywide entity following the acquisition.

     

    This opinion sums things up well. It was written as part of the $8.5B settlement. There are others on the web site but this was the first one. In New York there was risk and with the exception of the Fannie/Freddie settlements, New York law has applied. Shooting from the hip I don't think New York law applies in the DOJ case but I'm sure they would argue that it does.

     

    http://bit.ly/1liHPOB
    1 Aug, 07:28 AM Reply Like
  • bill coker
    , contributor
    Comments (11) | Send Message
     
    While I am on the subject of ad nauseum... Fun Fun ..your post are getting laborious . They are all the same. I do not agree with you about Moynihan. There again I would like to see some evidence of Moynihans culpability in any your accusations.
    31 Jul, 12:21 PM Reply Like
  • funfun
    , contributor
    Comments (2670) | Send Message
     
    Who are you to tell another investor how often to comment and what to say?

     

    Incidentally, every comment we make is timely, on subject and fresh. What is getting old which you ignore is the onslaught of viciously vindictive personal attacks against Seeking Alpha Contributors and commentators whose opinions fire up the abusive protectors and proponents of Bank of America Management. What they cannot rebut effectively by reason and civil opining, they attempt to suppress with unethical ad hominem defamation and derogatory smears. Since many of these apparent PR damage controllers have openly disclosed they have personal and family ties with the Bank or worked therein, investors get a face full of the unprincipled and arrogant culture which has earned this Bank such retribution in the courts of the land from blatant law-breaking.

     

    …funfun..
    31 Jul, 12:30 PM Reply Like
  • Minorcan31
    , contributor
    Comments (21) | Send Message
     
    Your version of what is happening, and the level of sensitivity you exhibit is amusing. Thanks to you for bringing that the the forum.

     

    The scripted posts generated from your department of redundancy department (pun intended) add nothing to the civil discourse that you indicate. Put down the thesauras and come up with something if you really want a civil discourse and the chance to discuss professional opinion. There is nothing fresh about what you add to every BAC article.

     

    I acknowledge that my post here does not add to the debate. Consider this merely as a free service to inform you of why I think you get pushback. Your narrow fundamental view of equity valuation (opinion of quality of mgmt) is just not everybody's cup of tea as far as evaluating the current stock price against the perceived value. If you can't be okay with that, so be it. But bristling at the mere disagreement with your repeated message is just tacky.

     

    Respectfully submitted.

     

    31 Jul, 01:03 PM Reply Like
  • Iknownothing
    , contributor
    Comments (69) | Send Message
     
    funfun

     

    Still boring boring.
    31 Jul, 01:58 PM Reply Like
  • Hello Again 83
    , contributor
    Comments (466) | Send Message
     
    Remember Fun Fun is really Don. Fun Fun is a creation of Don. He is not real.
    31 Jul, 02:09 PM Reply Like
  • healthpicker
    , contributor
    Comments (1026) | Send Message
     
    funfun, Bill is telling you that he doesn't agree with your continuous criticism of Moynihan. Neither do I - I have told you that many times.
    So he is not telling you what to say - more like telling you that you don't know what you are talking about a lot of the time - especially when it comes to Moynihan.
    31 Jul, 02:59 PM Reply Like
  • Seanebr
    , contributor
    Comments (132) | Send Message
     
    Hello Again 83 - I don't think so. Don is more mature and he's also not as off the wall as funfun. Based on my conversations on here with him, Don strikes me as a good guy, just a hardcore socialist. I imagine funfun on the other hand as a pesky little nerd with ADHD posting 40 comments per day on SA out of his mom's basement.
    1 Aug, 12:00 AM Reply Like
  • Doctor Who
    , contributor
    Comments (275) | Send Message
     
    The Doctor will be glad to debate Valarie Obama aka funfun. After all if am beginning our ninth iteration (or something like that) in August.

     

    Darlick Khan
    31 Jul, 12:51 PM Reply Like
  • Seanebr
    , contributor
    Comments (132) | Send Message
     
    I can't WAIT for midterm elections! Bye bye Eric Holder!
    31 Jul, 01:55 PM Reply Like
  • Seanebr
    , contributor
    Comments (132) | Send Message
     
    Can't believe DOJ is still firm at $17B after several BAC counter-offers. Is this a negotiation or just plain extortion? I don't think the DOJ WANTS to settle at all. Seems to me like they're trying to force the case to trial while making it appear like they gave BAC the opportunity to negotiate. Same thing Obama did during the shutdown. Stamped his feet, refusing to negotiate like an immature little brat, but somehow managed to make it look like the Republicans were at fault. Unbelievable! Gotta hand it to the Democrats. When it comes to passing the buck of blame, they sure do it masterfully!
    31 Jul, 02:01 PM Reply Like
  • JBBanker
    , contributor
    Comments (106) | Send Message
     
    I am unclear of the following statement:

     

    "Underscoring why no bank wants to see the inside of a courtroom on this, yesterday a judge ordered BofA to pay nearly $1.3B in another federal mortgage case."

     

    I read the article an didn't see that at all. It appears to be an opinion. I am not sure it is applicable or correct for what I drew from this case was the opposite. I say this based upon in court the government kept their demand for $2.1 billion dollars and the judge said no. The judge gave them 40% less than they requested. BAC and others now see that the government's damage requests in a court room can be reduced to 60 cents on the dollar. The other cost is that it some how is "Bad" for BAC's reputation and business. I think it helps to clear the air especially the majority of this occurred prior to BAC's ownership/control. The point that a Countrywide employee was fined as well helps show this.

     

    BAC's blink should be DOJ's best option, because the take away is the judicial system is likely to be far more favorable to BAC than the settlement offer.
    31 Jul, 03:27 PM Reply Like
  • overunder
    , contributor
    Comments (29) | Send Message
     
    Can't we all 'stop hating' and 'just get along'? (:
    31 Jul, 03:36 PM Reply Like
  • Scoreboard
    , contributor
    Comments (154) | Send Message
     
    Ignore trolls. Move on with discussion that will help you with YOUR investing.
    31 Jul, 04:22 PM Reply Like
  • Seanebr
    , contributor
    Comments (132) | Send Message
     
    I agree. Let's all ignore funfun.
    31 Jul, 09:19 PM Reply Like
  • funfun
    , contributor
    Comments (2670) | Send Message
     
    Folks, in the past decade, the megalomanic Management of this disreputable Bank of America decided to out-deceive, out-defraud, and out-cheat all of their counterparts on Wall Street. Now that they must pay an out-sized price for their brazen law-breaking, their apologists and advocates are screaming bloody murder! No amount of vicious PR damage control and dishonest blaming the "Government", can camouflage the colossal corruption of this gone-nowhere, going-nowhere Bank.

     

    Investors beware and be wary. ENRON Ethics destroys, does not build shareholder value!

     

    …funfun..
    1 Aug, 06:56 AM Reply Like
  • Seanebr
    , contributor
    Comments (132) | Send Message
     
    They've already paid close to $60B. That's about 60% of the total penalties charged against all the major banks combined since 2008! Since Countrywide was the biggest boiler-room of them all, I would say that's fair, up to this point. But that's enough. Period.

     

    Every dollar of penalty past this point does nothing but hurt the millions of hard-working, tax-paying American citizens who are the customers and shareholders of Bank of America!
    1 Aug, 07:07 AM Reply Like
  • funfun
    , contributor
    Comments (2670) | Send Message
     
    Enforcing the laws of the land, federal and state and regulatory, against fraud and misrepresentation "hurts American citizens" and "customers" and investors? We do not follow the logic at all or the strained deduction. As for BAC "shareholders", it is the Bank's Management and Directors by their gross acts of illegality on behalf of the Bank who have irreparably damaged the owners of the Bank, BAC shareholders!

     

    …funfun..
    1 Aug, 07:21 AM Reply Like
  • Wow72
    , contributor
    Comments (516) | Send Message
     
    Its funny Wrongwrong, not very many people think they way you do! Thats what I think! AND FOR THE RECORD IT WAS MOSTLY CW! You guys are nothing but engorged ticks on the ass of progress! Sucking the life blood from our country!
    Just remember CHIRAQ!
    1 Aug, 07:28 AM Reply Like
  • Seanebr
    , contributor
    Comments (132) | Send Message
     
    funfun - Are you saying that the" laws of the land" are always justifiable and enforceable? Should they NEVER be challenged? What about that one law we used to have that allowed white people to enslave black people? If we were to follow YOUR logic, then black people would still be riding in the back of the bus.

     

    A civilized democracy is one in which BS laws like FIRREA can be questioned, challenged, and amended. Anything less than that could be considered Fascism. Are you a fascist, funfun?
    1 Aug, 08:05 AM Reply Like
  • funfun
    , contributor
    Comments (2670) | Send Message
     
    Despite your dirty and abusively hostile query, "Are you a fascist, funfun?", we will reply:

     

    Laws against fraud, stealing, and cheating people and corporate investors is quintessentially fundamental in any democratic society of decent and honest citizens. In the 21st century, vilely corrupt officials and executives and employees of Bank of America, Bank of America Countrywide, and Bank of America Merrill Lynch violated those laws with abandon.

     

    Folks, any bank whose rabid Management supporters and surrogates have to resort to viciously vindictive ad hominem attacks against those with differing opinions is one undeniably sick and unethical operation!

     

    …funfun..
    1 Aug, 09:12 AM Reply Like
  • drgrier
    , contributor
    Comments (234) | Send Message
     
    Decent and Honest Citizens???
    What we have here are Politicians an Bueacrats.
    I find it difficult to refer to then as Decent and Honest. At best they are
    Self Serving.

     

    Your comments are getting So Very Boring at Best and Totally Uninformative.

     

    Seeking Alpha needs to Provide An IGNORE Option like Yahoo's Message Boards. JMHO..
    1 Aug, 03:10 PM Reply Like
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