Another slap on the wrist

Retail Bank of America

Of course! We wouldn’t want to send the wrong message, would we?

Bank of America is nearing a deal with federal regulators to settle an investigation into the bank’s suspected manipulation of the currency market, the latest sign that Wall Street is bracing for another crackdown on its misbehavior.

Bank of America disclosed the development on Thursday in a news release, saying that it had increased its legal costs to deal with the currency market investigation. Although the bank did not name the regulators, people briefed on the investigation identified the agencies as the Office of the Comptroller of the Currency and the Federal Reserve

In the news release, Bank of America said it recently had “advanced discussions” with the regulators about a potential settlement, forcing the bank to increase its legal reserves to pay for the expected fine. A settlement is not final, the people briefed on the matter said.

The increased legal bill resulted in a $400 million charge that cut into the earnings that Bank of America reported for the third quarter a few weeks ago. The charge resulted in the bank reporting a loss of $232 million, or 4 cents a share, in the quarter.

Bank of America becomes the latest bank ensnared in the foreign exchange investigation to retroactively increase its expected legal costs — and lower its earnings — after reporting third-quarter results last month. Banks are required to set aside legal reserves once they have a clear picture of the costs they are likely to pay in a potential settlement.

H/t Immigration Attorney April Cockerham.

One thought on “Another slap on the wrist

  1. The Justice Department is full of ex-corporate lawyers, chief among them Holder, so what else should we expect? The unemployment rate dropped to 5.8% down from 5.9% last month. So we got this headline from CNN: “Fewer jobs created then expected.” Somebody should remind CNN that corporations create jobs, Obama does not. So CNN’s headline should have read: “Capitalists create fewer jobs then expected.” In related news, incomes were up YOY 2.7%, spending was up 1.8% and saving was up 5.5%. It appears that the angrier people become the better their economic situation will get. That’s a law of nature.

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