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Merrill Lynch may face fraud action over underwriting

Robyn Hall

November 9, 2012

US District Judge Denise Cote in Manhattan said the Federal Housing Finance Agency may pursue fraud claims over Merrill’s representations in offering materials regarding mortgage underwriting standards.

The judge also allowed claims under Washington D.C. securities law as well as claims for punitive damages and claims to withdraw suspect mortgage transactions however some fraud claims were dismissed.

Lawrence Grayson, a spokesman for Bank of America, declined to comment.

Fannie Mae and Freddie Mac were seized by federal regulators on 7 September 2008 and the FHFA became its conservator.

A trial is scheduled for 2 June 2014.


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