WASHINGTON — US banking giant Bank of America has admitted it committed fraud in the municipal bond derivatives market and will pay 137.3 million dollars in damages, the government said Tuesday.
"Bank of America entities have agreed to pay a total of 137.3 million dollars in restitution to federal and state agencies for its participation in a conspiracy to rig bids in the municipal bond derivatives market," the Department of Justice said in a statement.
Bank of America entered into agreements with the US Securities and Exchange Commission, the Internal Revenue Service (IRS), the Office of the Comptroller of Currency and 20 state attorneys general, the department said.
The combined outcome provides for payment of restitution to the IRS and to municipalities harmed by the bank's anti-competitive conduct in the muni-bond derivatives market.
Bank of America employees engaged in illegal conduct, including bid rigging, in connection with the marketing and sale of tax-exempt municipal bond derivatives contracts, the department said.
The department also said the Charlotte, North Carolina-based bank, the biggest US bank by assets, had entered into a written agreement with the Federal Reserve Board "to address certain remedial measures."
The bank's board of directors is to submit a written plan within 90 days to the Federal Reserve Bank of Richmond in Virginia aimed at strengthening the board's oversight of the bank in competitively bid transactions, according to a document posted on the Fed's website.