DOVER, Del. (Legal Newsline) - Delaware Attorney General Beau Biden announced Thursday his objection to a proposed settlement between Bank of America and the Bank of New York Mellon.
He has petitioned the New York Supreme Court for permission to intervene in its review of the $8.5 billion settlement.
"I am intervening to enforce our laws and to protect Delaware investors who may have been harmed by these toxic securities," Biden
said. "Intervening in this settlement puts us in position to ensure that the banks are playing by the rules."
The proposal under consideration is to resolve claims that Countrywide Financial, now owned by Bank of America, defrauded investors by misrepresenting toxic loans that were bundled together and sold to investors.
Biden said intervention is necessary to ensure that the Delaware investors involved would have the ability to pursue legal action under Delaware law. Some of the defendants covered by the proposed settlement are incorporated in Delaware and are governed by Delaware law. The proposed settlement was agreed to without the input of many of the investors, Biden says.
The Countrywide loans were packaged into mortgage-backed securities and sold to trusts administered by Bank of New York Mellon. Investors in those trusts claimed that Bank of New York Mellon did not practice due diligence in reviewing the quality of the loans which totaled billions of dollars.