Bank of America has had to pay a lot of legal settlements and fines since 2009. The New York Times has a timeline. Here are the highlights, adding up to about $48 billion:
- June 7, 2008 $108 Million Settlement on Countrywide Fee Complaint
- Feb. 22, 2010 $150 Million Settlement With S.E.C. on Merrill Deal
- Aug. 2, 2010 $600 Million Settlement of Class-Action Suits Against Countrywide
- June 28, 2011 $8.5 Billion Deal in Investor Suit on Mortgage Debt
- Dec. 21, 2011 $335 Million Settlement in Justice Department’s Bias Suit
- Feb. 8, 2012 $11.8 Billion Settlement on Foreclosure Abuses
- The bank also agrees to a $1 billion settlement with the federal government over Countrywide loans awarded to “unqualified” borrowers and insured by the Federal Housing Administration.
- Sept. 28, 2012 $2.43 Billion Shareholder Settlement Over Merrill
- March 26, 2014 $6.3 Billion Settlement of F.H.F.A.’s Mortgage Lawsuit
- July 30, 2014 $1.3 Billion Penalty in Federal Mortgage Case
- Aug. 21, 2014 $16.65 Billion Mortgage Settlement
What happened to Bank of America’s share price before, during, and after the crisis? Remarkable really how short-lived the deep stock price downturn was. In the first three months of 2009 the price hit the low of just over $3, but rebounded quickly to about $12. Bank of America bought Countrywide and Merrill Lynch in 2008 (the Merrill deal closed on January 1, 2009), and the stock plummeted partially because of fears and information that Merrill Lynch was vastly more exposed to mortgage lending and derivatives than Bank of America had thought. Over the longer term, the stock basically went from $50 to $20. Anyone who thinks bankers made a killing because of the crisis has to reconcile that basic fact. If you bought shares in Bank of America in 2005, anticipating the crisis, assuming that this bank, along with Chase, was going to emerge as the undisputed winner, and so you, as an owner, were going to really do well… you were wrong.
Nevertheless, there is still time to profit from the financial crisis. Analyst consensus is that Bank of America is going up, because profits are going to rise dramatically in 2015 and 2016. So again, if you think the big banks profited handsomely from the crisis, then step up and become a part owner. Use the resulting tainted (your words not mine) profits to fund Friends of African Village Libraries.