Bank of America entities have agreed to pay a total of $137.3 million in restitution to federal and state agencies for its participation in a conspiracy to rig bids in the municipal bond derivatives market, the Antitrust Corporate Leniency Program announced today. The company’s employees engaged in illegal conduct, including bid rigging and other deceptive practices, in connection with the marketing and sale of tax-exempt municipal bond derivatives contracts.
According to agreements announced today, Bank of America was the first and only entity to come forward and report its wrongdoing to the Antitrust Corporate Leniency Program before the department opened its investigation into anticompetitive conduct in the municipal bond derivatives industry. The ongoing investigation has resulted in charges against seven executives and one corporate entity and guilty pleas by eight executives for antitrust and related federal crimes.
“The Antitrust Corporate Leniency Program is essential to our criminal enforcement of the antitrust laws,” said Christine Varney, Assistant Attorney General in charge of the Antitrust Division. “Bank of America’s disclosure of wrongdoing and cooperation has led to an aggressive, ongoing investigation by the Antitrust Corporate Leniency Program into anticompetitive activity in the municipal bond derivatives industry. The bank’s participation in the leniency program has also resulted in today’s resolution to address the harm caused by its wrongdoing.”
The company entered into agreements with the U.S. Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), the Office of the Comptroller of Currency (OCC), and 20 State Attorneys General. The global resolution with these federal and state entities provides for payment of restitution to the IRS and to municipalities harmed by Bank of America’s anticompetitive conduct in the municipal bond derivatives market. In a related matter, Bank of America entered into a written agreement with the Federal Reserve Board to address certain remedial measures.
As a condition of its admission into the Antitrust Corporate Leniency Program, Bank of America was required to be the first entity to self-report the anticompetitive conduct, acknowledge its wrongdoing, provide ongoing cooperation in the investigation and make full restitution to the victims of the conspiracy. Bank of America continues to provide significant cooperation to the federal and state enforcement officials in their ongoing parallel investigations in the municipal bond derivatives industry.
The Antitrust Corporate Leniency Program is designed to deter and detect anticompetitive behavior. Through the Leniency Program, a corporation can avoid criminal conviction and fines, and individuals can avoid criminal conviction, prison terms and fines, if the corporation or individual is the first to report participation in a criminal antitrust violation and if other specified requirements of the program are met.
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Key Facts
- State: Federal
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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