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    Bank of America CEO Moynihan must testify in MBIA lawsuit: judge

    Reuters – Thu, Apr 12, 2012

    NEW YORK (Reuters) - A New York judge has ruled that Bank of America CEO Brian Moynihan must testify in a lawsuit brought by bond insurer MBIA Inc. which claims the bank fraudulently induced it to insure risky mortgage-backed securities.

    The judge said Moynihan could provide relevant testimony in the case due to his position as CEO, former president of investment banking and the fact that he oversaw the process of integrating Countrywide into Bank of America.

    Bank of America acquired mortgage lender Countrywide in July 2008. MBIA filed a Countrywide later that year. In 2009, MBIA claimed Bank of America was liable for Countrywide's conduct.

    Bank of America, the second-largest U.S. bank by assets, is fighting several legal cases following the global financial crisis and had sought to block MBIA efforts for Moynihan to give evidence.

    MBIA was once the largest U.S. municipal bond insurer. It announced a restructuring in 2009 after incurring large losses insuring mortgage debt.

    Bank of America had asked New York Supreme Court Justice Eileen Bransten to rule that Moynihan did not need to testify, arguing that MBIA was seeking his deposition only to harass the bank and that Moynihan had no unique knowledge about the case.

    But the judge on Wednesday denied the request, according to court papers made public on Thursday.

    "The knowledge Moynihan gained as part of the (Countrywide) Steering Committee is unique, and it is material and necessary to MBIA's successor liability claim," the judge said.

    Moynihan was involved in "high-level decisions regarding the Countrywide transaction" and his testimony will not duplicate that of lower-level employees, she said.

    MBIA declined to comment and Bank of America did not immediately respond to requests for comment.

    The cases is MBIA Insurance Corp v. Countrywide Home Loans Inc et al, New York State Supreme Court, New York County, No. 602825/2008.

    (Reporting By Erin Geiger Smith; Editing by Michael Perry)

     

    2 comments

    • Jay
      Jay  •  La Crosse, Wisconsin  •  5 days ago
      B of A stole the house from my disabled mom! She had to take a loan out for medical bills and they raised the rates well above beyond what she could pay! B of A dont care about anyone or anything except lining there pockets! I strongly agree that there should be prison time for the top execs that are out of touch with the American people! My hart goes out to people like my mom. I am sickened by there cheesy TV adds, make me want to throw up! All she ways is to have a refi on her terms, and get the house back, plain and simple. What if we took there houses and made them homeless? Turn the tables?? After all fair is fair! B of A should be ordered to stop doing any business at once! I dont know how these people live with themselves at night? God will judge accordingly
    • Robert M
      Robert M  •  1 mth 10 days ago
      When will we see these perpetrators of fraud charged with that criminal offense, arrested, given trial and if justice is done; convicted and forced to serve their time. BoA stole 5k from me and I've never done any willing business with them ... it is a B of Thieves. Shut this too big to fail economy destruction engine down.
     Post a comment
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