US Justice Department Accuses Bank Of America Of Mortgage-Backed Securities Fraud

The U.S. Justice Department Tuesday filed an $850 million suit against the Bank of America (NYSE:BAC), charging it with mortgage-backed securities fraud.

“Bank of America’s reckless and fraudulent origination and securitization practices in the lead-up to the financial crisis caused significant losses to investors,” U.S. Attorney Tompkins said, in a statement.

“Now, Bank of America will have to face the consequences of its actions. We have made a commitment to the American people to hold financial institutions accountable for practices that violated the law and wreaked havoc on the financial system, and my office takes that commitment very seriously. Our investigation into Bank of America’s mortgage and securitization practices continues.”

Shares of the second-largest U.S. bank by assets, on Tuesday, fell 16 cents to close at $14.64.