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Bank of America Agrees to Pay for Municipal Bond Case

Bank of America Corp has decided to pay $137 million to patch up allegations that helped rig the municipal bond bidding process and win several businesses from towns and cities in 20 states. This agreement is expected to cause more cases being filed in the next several weeks and months.

Federal, as well as state officials have announced the settlements on Tuesday along with the largest bank in the nation.

The bank did not admit nor deny any of the accusations in its agreement with the Justice Department, the Federal Reserve, the Securities and Exchange Commissions, and several attorneys universal for 20 states.

According to the Justice Department, the Bank of America came over and revealed that Banc of America Securities, a part of the bank that manages securities and investments, paid for information that helped the bank gain advantage with the government from the local unit that was finding to invest their proceeds from the municipal bond sales.

The Securities and Exchange Commission said the bank division paid money as “kickbacks” to bidding agents who gathered proposals for government business. In return, the bank received information regarding what other firms were bidding.

This revelation resulted from federal officials launching a widespread investigation regarding the business of reinvesting municipal bond proceeds.

Bank of America, which is the first largest U.S bank by assets, was granted amnesty from any penalties since they were the first to report the violations to regulators and they cooperated with the investigation.

A Bank of America spokesman said that the financial institution is pleased to put this matter behind them, and they have already voluntarily undertaken several remediation efforts.

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