Boston, MA 02/04/2014 (wallstreetpr) – Bank of America Corp (NYSE:BAC) is said to be planning to cut down its bonus pool for interest rate traders from a high of 35% to as low as 20%. This move has been necessitated by the declining revenue amidst the litigation cases that it is trying to solve under its ranks. It is rumored that senior traders are the ones who will be mostly with large percentage drops. Rates are normally dictated by individual performance rather than the performance of the whole pool. This is the main reason why some traders saw their rates hold steadily while other faced rates drop of up to 20%.
Bank of America facing another $2.1 billion case
Bank of America Corp (NYSE:BAC) might have thought it is picking itself from litigation cases in courts but not for now. Recent revelation indicate the US government has raised the amount it is seeking in penalties from one of the largest banks in the US. The US government is seeking to raise a total of $2.1 billion from the bank after it was found liable of trading in defective mortgages that were sold by its countrywide unit. The justice department had previously asked for $83.6 million but decided to up the amount based on the gross revenue generated by the fraud.
Bank of America being punished
The settlements that have been hitting Bank of America Corp (NYSE:BAC) can be thought to be self-inflicted as it is claimed the countrywide unit at BAC that dealt with defective mortgages rewarded employees for the quantity of mortgages they sold rather than the quality. BAC is also accused of eliminating check lists that are normally used to ensure loans are sound and legal. BAC has seen its litigation expenses increase from a low of $916 million to a high of $2.3 billion in 2013. The government is also still pursuing Mairone a former mid-level executive at Countrywide to pay a penalty of $1.1 million as they suit her highly capable
The unending court cases seems to be taking toil on Bank of America Corp (NYSE:BAC) which closed Monday trading session at a low of $16.35 a drop of 2.35%
