Friday, December 28, 2012

New Settlement Exposes More Shady Dealing

It seems that every other week Bank of America is being exposed for shady dealings in a variety of areas.  They are being successfully sued and forced to settle legal and regulatory issues all over the country.  The latest example was revealed in yet another settlement between Bank of America (and other financial institutions) and a regulatory agency.

Bloomberg reports on the latest chapter of shady dealing:
Local authorities were unfairly asked to reimburse payments that the firms made over five years to a California lobbying group to help them influence the state, the Financial Industry Regulatory Authority said yesterday in a statement.  
The firms inadequately described the fees, wrapping them into bond- underwriting expenses...
The banks...agreed to pay $3.35 million in fines and reimburse certain California bond issuers $1.13 million, according to the statement....  
 The lobbying payments spanned 2006 through 2010... 

The chief of enforcement at the Financial Industry Regulatory Authority (FINRA) made the following observation about these activities:
 "It was unfair for these underwriters to pass along the costs of their Cal PSA membership to the municipal and state bond taxpayers, neglecting to disclose that these costs were unrelated to the bond deals," 
FINRA went on to state that Bank of America and the other firms violated fair dealing and supervisory rules of the Municipal Securities Rulemaking Board.

This hardly elicits confidence from someone that is currently trying in good faith to negotiate a "fair deal" with Bank of America.  How can a simple homeowner or policymakers for that matter trust them? How do you approach a firm with this kind of persistent disregard for regulations, rules and common decency? If we can't trust them to abide by simple rules and regulations, how can we trust them to abide by their various settlement agreements and pronouncements?

UPDATE: Apparently it doesn't matter that the big banks keep violating rules, regulations, agreements and laws because it still pays off big for them.  From Huffington Post Finance today: "Finance Stocks Dominate The Market In 2012 Despite Continuous Fines, Scandals and Fraud"

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