Biden
WILMINGTON, Del. (Legal Newsline) - Delaware Attorney General Beau Biden is reportedly joining the fight against a proposed $8.5 billion settlement between Bank of New York Mellon Corp. and Bank of America.
Biden told Delaware's News Journal on Tuesday that he has asked the New York State Supreme Court to let him join the lawsuit filed by New York Attorney General Eric Schneiderman last week.
The deal covers more than 500 troubled mortgage pools issued by Countrywide Financial. Bank of America bought Countrywide in 2008.
Schneiderman is accusing Bank of New York of fraud in its role as a trustee overseeing the pools for investors.
According to the lawsuit, he alleges that the bank misled and breached its duties to investors.
In turn, Bank of New York should pay penalties and restitution, the attorney general argues. Schneiderman also asked a judge to reject the settlement.
A spokesman for the bank said last week that Schneiderman's allegations are "outrageous" and "baseless."
"We are confident that we have fulfilled in all respects our responsibilities as trustee," Ron Gruendl said. "The AG's action is misguided and fails to comprehend the role of the trustee and the benefit the settlement would provide to investors."
Last month, in letters to more than a dozen investment firms involved in the deal, Schneiderman said he was concerned the settlement was made without the full participation of those affected investors.
Biden told the News Journal that he, too, thinks the bank misled investors.
According to the newspaper, at least two of the 500-plus trusts covered by the settlement are incorporated in Delaware and governed by Delaware law.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.