Tomahawk, WI 08/21/2014 (Basicsmedia) – Bank of America Corp (NYSE:BAC) is reportedly closing in on a $17 billion settlement package with the department of justice, as settlement for duping investors into buying substandard mortgage securities during the economic crisis of 2008. The payout according to Bloomberg’s John Dawson is quite high compared to what the likes of JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc. (NYSE:C) were forced to pay in relation to the same matter.
“$17 billion is the payout including $9 billion in cash compare that to City’s $7 billion settlement back in July or indeed November of last year JPMorgan Chase & Co. (NYSE:JPM)’s $13 billion; as you said they are being punished the hardest. It is going to resolve certain investigations by the federal and state prosecutors from California, and New York City said” Mr. Dawson.
Dawson could not fail to point out that Bank of America Corp (NYSE:BAC) CEO, Brian Moynihan, since assuming office in 2010 after the financial crisis has been forced to settle numerous lawsuits leveled against the bank. The bank is reported to have paid a total of $55 billion mostly related to mortgage discrepancies that occurred during the financial crisis.
Despite the imminent $17 billion settlement charge, Bank of America Corp (NYSE:BAC) is reported to be in the process of increasing the salary of its junior employees as it seeks to prevent them falling prey of the huge salaries normally offered by private equity firms and hedge funds. Goldman Sachs and JPMorgan Chase & Co. (NYSE:JPM) are reportedly increasing pay for their junior staff by 20% with bonuses set to be offered based on performance.
“ The biggest concern is losing junior staff; college graduates for example to private equity and hedge funds where they end getting paid higher salaries, better bonuses safer jobs; for example they won’t get their jobs cut. So how do you retain good quality talented young staff you pay them extra obviously,” said Mr. Dawson.
The $17 billion settlement if implemented will be the biggest in history against a single company in American soil.