Bank of America Corp (NYSE:BAC) In The Clutches Of Italian Financial Police?
The financial police in Italy have seized €15M from Bank of America Corp (NYSE:BAC) Merrill Lynch. On Thursday, the police said that this is part of an investigation into an alleged-fraud that involves derivative-contracts with Verona City. The money was seized at Bank of America Corp (NYSE:BAC) Merrill Lynch Milan headquarters and the seizure had been carried out at the behest of Verona prosecutors said a police spokesperson.
Open to settlement
A source from Milan’s tax police said that this seizure is connected to the allegations of some hidden-commissions in derivative-contracts underwriting, which dated back to 2007. The source also said that the contracts amounted to a total of €256m. Bank of America Corp (NYSE:BAC) had acquired Merrill Lynch in 2009 and the latter did not make any immediate comment about this development. A lawyer for Verona City said that the city council was open to reaching a settlement with Bank of America Corp (NYSE:BAC)
The lawyer, Tommaso Iaquinta said that the administration is willing to seek a negotiated-settlement with the bank in order to safeguard the city’s financial position irrespective of any legal developments that occur in the criminal case, in the future.
At the start of 2013, the city had also reached an out of court settlement with UniCredit, the Italian lender. This was also in connection with derivative contracts.
The Italian local-authorities are cash-strapped and have unleashed a slew of derivatives deals-related disputes against banks. They have accused the banks of lack of transparency in their business dealings. The Italian region Piedmont had reached a derivative contract settlement with Merrill Lynch in June this year, which had amounted to €1.8bn.
Thursday’s trading session
In Thursday’s trading, Bank of America Corp (NYSE:BAC) dropped by 0.43%. The shares opened at a price of $14.07, climbed to an intraday high of $14.10 and dipped to a close of $14.00.