A federal judge ruled Wednesday that the U.S. can pursue parts of a civil lawsuit against Bank of America for its sale of toxic mortgages to Fannie Mae and Freddie Mac, boosting a largely untested legal theory the government used in the case.
Bank of America had sought to dismiss the lawsuit, which seeks penalties under two laws. One is the False Claims Act, which is often used to target fraud against the government, and the other is the 1989 FIRREA law.
FIRREA doesn't yet have much of a track record in court, but the government turned to in the wake of the financial crisis as a potential means to target civil fraud involving financial institutions.
U.S. District Judge Jed Rakoff issued a two-page ruling that dismissed the claims in the lawsuit seeking penalties under the False Claims Act, but allowed the claims that seek penalties under FIRREA to advance. Rakoff, in New York, said he will explain the reasons for his decision at a later date.
The ruling comes as something of a surprise, since Rakoff at a hearing last month appeared skeptical of how the Justice Department had used FIRREA in its case.
The lawsuit, which blames Bank of America for more than $1 billion in losses incurred by the government-controlled mortgage finance companies, accuses the bank of engaging in a scheme to defraud them through a program started at the former Countrywide Financial Corp., which the bank acquired in 2008.
FIRREA, or the Financial Institutions Reform, Recovery, and Enforcement Act, allows the government to seek civil penalties against anyone who commits a fraud "affecting a federally insured financial institution."
But in a trio of cases, banks including Bank of America Corp. (BAC), Bank of New York Mellon Corp. (BK) and Wells Fargo & Co. (WFC) have argued that the law cannot apply when the only financial institution affected by a fraud was the institution that allegedly committed the fraud.
Another federal judge in New York rejected that argument last month in a case against Bank of New York Mellon, and allowed accusations that the bank overcharged clients for trading currencies to move forward.
A Justice Department spokeswoman declined to comment on the Wednesday ruling. A representative for Bank of America did not immediately respond to a request for comment.
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Satellite radio has never been more popular. There are now 23.9 million subscribers after the parent company of Sirius and XM closed out 2012 with 2 million more accounts than it had when the year began.
However, Sirius XM lost its longstanding CEO late last year, and a media conglomerate has acquired a controlling stake in the satellite radio provider -- events that have triggered uncertainty.
Still, Sirius XM is a company that has been consistently profitable and generating growing amounts of revenue and free cash flow on its own. And, auto sales also remain strong: Those represent the largest source of new subscribers for Sirius XM, as most of its users tune in through car factory-installed receivers.
A few years ago, Nokia was the undisputed top dog in mobile phone handsets. The Finnish company was a global juggernaut at a time when consumers were swapping beepers -- remember those? -- for wireless phones.
But the market has evolved repeatedly since then. Cheaper feature phones have been replaced by smartphones that run apps and surf the Web, and Nokia has been slow to embrace the platforms that matter. Obviously it couldn't put out an iPhone, but it also wasn't able to match Samsung's early push into Android devices that are now globally popular.
Nokia is accepting billions to back Microsoft's fledgling Windows Phone mobile operating system, but the stock has been stuck in the single digits for more than two years.
It isn't easy being a regional telco, offering up landlines, Internet, and cable TV to rural markets.
A big draw for investors in Frontier Communications is its meaty dividend payout. Even after slashing its quarterly rate from $0.1875 a share to $0.10 a share last year, the stock's still yielding 10 percent. The large dividend is significant, since shorts actually have to cover that when it gets paid out.
Analysts see revenue and profitability continuing to decline here, and pessimists are holding out for more dividend cuts in the future.
The old "Intel inside" ads came out at a time when PC sales were booming. Manufacturers were hopping on Intel microprocessors to power desktops and laptops, only turning to smaller rival Advanced Micro Devices (AMD) when they wanted to show Intel that they weren't entirely dependent on the chip giant.
But the tech world have taken an "Intel outside" approach in recent years. PC shipments have fallen for two years, and Intel's efforts to get its chips into the smartphones and tablets that people are actually buying haven't been effective enough to offset its declines on the PC side.
The poster child for the "too big to fail" banking giants is starting to bounce back.
Bank of America stock hit a fresh 52-week high this month, and regulators finally eased up on the bank after it cleared its stress test. That freed Bank of America to return more of its money to shareholders beyond its token quarterly dividend of $0.01 a share, and the financial services giant's first move was to declare a huge share repurchase program.
As long as the housing market holds up and the general state of corporate America makes lending money to companies a smart bet, Bank of America will do just fine. Shorts, naturally, don't see it that way at all.