Bank of America just settled with the Department of Justice, the
SEC and several states for $16.65 billion stemming from
allegations the bank misrepresented the credit quality of
their Mortgage-Backed Securities (MBS) and mislead
The settlement includes a cash payment of $9.65 billion along
with $7 billion in consumer aid in the way of modifying
For those keeping score at home, that brings Bank of America's
total to $74.58 billion. That dwarfs big payments and
settlements from J.P. Morgan Chase ($27 bn), Citibank ($12 bn), and
Wells Fargo ($10 bn).
This last settlement is likely one of the last remaining big
money settlements coming out of major U.S. banks.
Assuming the worst is over,
do the settlements make you feel better or worse as an
investor in the
On one hand, you have to be happy these are over for the most
part. But the other side of that sword is, you're invested in
companies who have basically admitted to fraud. It's hard to get
that warm, tingly feeling when you're investing in a company
that's done business like that in the past. Who is to say
that a scenario like this doesn't pop up in the future?
These settlements make me feel better about investing in these
companies. This is going to happen from time to time,
although maybe not this egregiously. Legislation will always trail
the financial industry. These types of scenarios are really
just the price of doing business.
What do you think?
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BANK OF AMER CP (BAC): Free Stock Analysis
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