Bank of America Penalty Thrown Out in Crisis-Era ‘Hustle’ Case
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Appeals court says government didn’t prove case, bank doesn’t have to pay $1.27 billion.
An appeals court dealt the Obama administration a major setback in its efforts to levy tough fines on corporations and executives, overturning a civil mortgage-fraud case against Bank of America Corp. tied to the financial crisis.
The court on Monday also tossed out a $1 million civil penalty against Rebecca Mairone , a former executive at Countrywide Financial Corp., who was one of the few individuals fined for alleged misdeeds during the crisis.
The ruling by the Second U.S. Circuit Court of Appeals in New York raises the bar for the government to prove fraud against companies and individuals, weakening a weapon the Justice Department has used to push Wall Street to agree to big mortgage settlements.
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