Bank of America 2013 Annual Report Download - page 230

228 Bank of America 2013
Columbia Circuit denied BANA’s petition for writ of mandamus that
sought to vacate the December 10, 2012 and March 6, 2013
rulings.
On May 3, 2013, the FDIC filed a motion to dismiss BANA’s
claims against the FDIC in its capacity as receiver for Colonial
Bank, citing a Notice of No Value Determination, dated April 15,
2013, published by the FDIC in the Federal Register, 78 Fed. Reg.
76, 23565 (the No Value Determination). On July 22, 2013, BANA
filed a complaint against the FDIC in the U.S. District Court for the
District of Columbia entitled Bank of America, N.A. v. Federal Deposit
Insurance Corporation, challenging the FDIC’s No Value
Determination pursuant to the Administrative Procedure Act (the
APA Action). On August 26, 2013, the U.S. District Court for the
District of Columbia granted the FDIC’s motion to dismiss BANA’s
claims against the FDIC in its capacity as receiver for Colonial
Bank. The court ruled that the order of judgment would be held in
abeyance pending resolution of the APA Action.
O’Donnell Litigation
On February 24, 2012, Edward O’Donnell filed a sealed qui tam
complaint against the Corporation, individually, and as successor
to Countrywide, CHL and a Countrywide business division known
as Full Spectrum Lending. On October 24, 2012, the DOJ filed a
complaint-in-intervention to join the matter, adding BANA,
Countrywide and CHL as defendants. The action is entitled United
States of America, ex rel, Edward O’Donnell, appearing Qui Tam v.
Bank of America Corp, et al., and was filed in the U.S. District Court
for the Southern District of New York. The complaint-in-intervention
asserts certain fraud claims in connection with the sale of loans
to FNMA and FHLMC by Full Spectrum Lending and by the
Corporation and BANA from 2006 continuing through 2009 and
also asserts successor liability against the Corporation and BANA.
Plaintiff originally sought treble damages pursuant to the False
Claims Act and civil penalties pursuant to FIRREA. On January 11,
2013, the government filed an amended complaint which added
Countrywide Bank, FSB (CFSB) and a former officer of the
Corporation as defendants. The court dismissed the False Claims
Act counts on May 8, 2013. On September 24, 2013, the
government dismissed the Corporation as a defendant.
Following a trial, on October 23, 2013, a verdict of liability was
returned against CHL, CFSB and BANA. The court may impose civil
monetary penalties under FIRREA.
Pennsylvania Public School Employees’ Retirement
System
The Corporation and several current and former officers were
named as defendants in a putative class action filed in the U.S.
District Court for the Southern District of New York entitled
Pennsylvania Public School Employees’ Retirement System v. Bank
of America, et al.
Following the filing of a complaint on February 2, 2011, plaintiff
subsequently filed an amended complaint on September 23, 2011
in which plaintiff sought to sue on behalf of all persons who
acquired the Corporation’s common stock between February 27,
2009 and October 19, 2010 and “Common Equivalent Securities”
sold in a December 2009 offering. The amended complaint
asserted claims under Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934 and Sections 11 and 15 of the Securities
Act of 1933, and alleged that the Corporation’s public statements:
(i) concealed problems in the Corporation’s mortgage servicing
business resulting from the widespread use of the Mortgage
Electronic Recording System; (ii) failed to disclose the
Corporation’s exposure to mortgage repurchase claims; (iii)
misrepresented the adequacy of internal controls; and (iv) violated
certain Generally Accepted Accounting Principles. The amended
complaint sought unspecified damages.
On July 11, 2012, the court granted in part and denied in part
defendants’ motions to dismiss the amended complaint. All claims
under the Securities Act were dismissed against all defendants,
with prejudice. The motion to dismiss the claim against the
Corporation under Section 10(b) of the Exchange Act was denied.
All claims under the Exchange Act against the officers were
dismissed, with leave to replead. Defendants moved to dismiss a
second amended complaint in which plaintiff sought to replead
claims against certain current and former officers under Sections
10(b) and 20(a). On April 17, 2013, the court granted in part and
denied in part the motion to dismiss, sustaining Sections 10(b)
and 20(a) claims against the current and former officers.