BofA settles municipal derivatives-rigging claims

Deal is on top of $62.5 million the bank contributed to settlement fund

Dec 5, 2013 @ 11:06 am (Updated 11:35 am) EST

bank of america, municipal derivatives, settlement, municipalities
Bloomberg News

Bank of America Corp. has agreed to pay $20 million to settle a class-action lawsuit by a group of government entities which alleged the bank was part of a conspiracy that rigged bids for municipal derivatives.

The $20 million is in addition to the $62.5 million Bank of America contributed to a settlement fund established by state attorneys general, according to a request to approve the proposed settlement filed today in U,S. District Court in Manhattan.

Baltimore is among the lead plaintiffs that accused a group of banks, brokers and dealers of conspiring with one another to refrain from competing and to rig bids for municipal derivatives sold to issuers of municipal bonds. The defendants allegedly allocated customers among themselves and fixed and stabilized prices, including the interest rates paid to issuers.

Lawrence Grayson, a spokesman for Bank of America, didn't immediately respond to an e-mail seeking comment on the settlement.

(Bloomberg News)