A judge ruled Friday to allow the Delaware and New York attorneys general to pursue litigation in Bank of America's $8.5 billion settlement with major investors.
[IMAGE]“I am pleased with Judge Pauley’s ruling,"" said Delaware Attorney General Beau Biden in a statement released to DSNews.com. ""This decision allows us to protect Delaware investors who may have been harmed by toxic securities.""
Bank of America reached the settlement agreement with Bank of New York Mellon â€" the trustee for the 530 mortgage-backed securities trusts in question â€" in June. These securities were sold by Countrywide Financial, which Bank of America purchased in 2008.
""This action concerns far more than the financial interests of a few sophisticated investors,"" stated Judge William H.
[COLUMN_BREAK]Pauley, according to the ""_Wall Street Journal._"":http://online.wsj.com/article/BT-CO-20111121-709339.html ""And the intervention of the State AGs in this action will protect the interests of absent investors.""
Bank of New York Mellon maintains that all investors' interests ""are adequately represented without the intervention of state attorneys general,"" according to the _Journal._
Biden first announced his opposition to the settlement in August, and New York Attorney General Eric Schneiderman began investigating the settlement in July.
The two attorneys general wish to protect investors who were not involved in the settlement negotiations.
“As it is currently structured, this settlement will have a profound negative effect on Delaware borrowers,"" Biden said in the statement released to DSNews.com. ""The conflicts of interest inherent in the current mortgage financing system would be reinforced, rather than resolved.""
""Any settlement must require the re-purchase of bad mortgages by the banks responsible for securitizing this toxic debt,†Biden continued.
""Today's ruling is an important victory in Attorney General Schneiderman's continued work to protect the integrity of New York's global financial markets while providing meaningful relief to those who have suffered from the mortgage crisis,"" said Danny Kanner, a spokesman for Schneiderman, according to ""_Bloomberg._"":http://www.bloomberg.com/news/2011-11-21/new-york-delaware-can-intervene-in-bofa-mortgage-settlement.html