Bank Of America Fraud Essay
Bank of America Fraud Case 2013 When one invests their time, money, and life into a business it is expected that everything is told to one and they are not mislead by a company or cooperation. Fraud is when one intentionally withholds information in order to have a positive impact whether it is financially or personally. Bank of America was charged by The Securities and Exchange Commission in 2013 for defrauding investors by not disclosing key risks and misrepresenting facts about underlying mortgages (Sec.gov). I believe that this is unacceptable and that Bank of America should have been straight forward and truthful about each and every account they had. Investors could have been blindsided and took a major loss due to Bank of America being deceptive in order to obtain more investors.
On August 6th 2013, The Securities and Exchange Commission alleged that Bank of America did not inform investors about 70 percent of mortgages backing the offering were through a wholesale channel which where
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The Bank of America did not make this information available to the public or inform this to all of their investors which ultimately caused them to obtain a fraud charge. It is required under the federal securities law to advise this information (Sec.gov). The Co-Director of the SEC’s Division of Enforcement, George S. Canellos said, “In its own words, Bank of America ‘shifted the risk’ of loss from its own books to unsuspecting investors, and then ignored its responsibility to make a full and accurate disclosure to all investors equally (Sec.gov).” Mr. Canellos was exactly right, by withholding this information and obtaining more investors it then switch the liability onto the new investors and cleared Bank of America from a tragic financial loss. This caused them to violate the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Sec.gov). This caused Bank of America to lose nearly 70 million dollars and
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