TRENTON — New Jersey will receive $1.4 million as part of a nationwide settlement with Bank of America, which was accused of bid-rigging when marketing municipal bond contracts. As part of the settlement, which includes federal agencies and 20 states, the bank will pay a total of $137.3 million. "This ongoing investigation has helped to expose widespread corruption in...
The facade of the Bank of America is seen on Dec. 3, 2010, in Washington, D.C.TRENTON — New Jersey will receive $1.4 million as part of a nationwide settlement with Bank of America, which was accused of bid-rigging when marketing municipal bond contracts.
As part of the settlement, which includes federal agencies and 20 states, the bank will pay a total of $137.3 million.
"This ongoing investigation has helped to expose widespread corruption in the municipal reinvestment industry," said Robert Khuzami, director of the Division of Enforcement at the Securities and Exchange Commission. "The conduct was egregious — in return for business, the company repeatedly paid undisclosed gratuitous payments and kickbacks and affirmatively misrepresented that the bidding process was proper."
Bank of America allegedly rigged the bidding for government investments, paying kickbacks to either learn what the winning bid would be or orchestrating the process so the bank would win.
Leland Moore, spokesman for the New Jersey Attorney General’s office, said the state will conduct a claims process to see which of approximately 20 government entities will receive some of the state’s $1.4 million settlement.
Two state agencies already confirmed to receive portions of the SEC’s share of the national settlement: the Trenton Parking Authority is getting $109,734 and the New Jersey Transit Corporation is getting $330,990.
"Bank of America’s disclosure of wrongdoing and cooperation has led to an aggressive, ongoing investigation by the Department of Justice into anticompetitive activity in the municipal bond derivatives industry," said Assistant Attorney General Christine Varney, who runs the Department of Justice’s Antitrust Division.
Bank of America released a statement emphasizing it is the only financial institution to self-report possible wrongdoing to federal officials.
"The regulatory agencies recognized that the Bank stepped forward and reported evidence of improper bidding practices in the industry, cooperated extensively and assisted investigations," the bank said. "The bank also took appropriate personnel actions and other measures to ensure that these or similar practices would not occur again."