Recently, the United States of America Department of Justice have appeared to struck gold with the help of the law which was wielded against one of the nation’s largest banks, which is Bank of America Corp (NYSE:BAC) over the conduct which was the reason behind the occurrence of the financial crisis.
In order to convince a jury that the Bank of America Corp engaged in a fraud, the lawyers of Manhattan US Attorney’s Office turned to FIRREA, which is a once – dormant civil fraud statue which essentially allows the government to build a criminal case against the financial institutions. But this can be done with the help of proving beyond a reasonable doubt.
The Justice Department of the United States of America has tried to make use of the in an array of the bank cases. This is being especially done for those cases which are tied to the housing bubble and subsequent collapse after the similar criminal investigations did not provide any kind of proper information or charges against the bank.
According to the recent verdict made available, the bank was found faulted for making bad home loans and passing them forward to Freddie Mac and Fannie Mae. This was found in the first test done in FIRREA. Moreover, making use of this law would facilitate in building good relations between the Wall Street and the Justice Department of the United States of America.
FIRREA is the Financial Institutions Reform, Recovery and Enforcement Act which was passed in the year 1989 in response to the savings and loan crisis. The Justice Department of the United States of America is making use of the law of FIRREA in nearly all the cases which are being brought forward against any kind of financial institutions.
