This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Bank of America Loses Fraud Case Over 'Hustle'

Stocks in this article: BAC JPM

This story has been updated with a response from JPMorgan.

NEW YORK (TheStreet) -- Bank of America (BAC) was found liable for fraud by a jury in a civil trial over a lending program from at least 2007 to 2009 known internally as "Hustle," which resulted in billions of dollars of defective loans.

The U.S. Department of Justice last year sued Bank of America over the loans, made by Countrywide Financial, which Bank of America acquired in 2008. The loans produced $848.2 million in losses for Fannie Mae (FNMA) and Freddie Mac (FMCC), which is the amount the U.S. is seeking to recover. U.S. District Judge Jed Rakoff will determine the penalty.

The jury found Bank of America guilty of one count of fraud. It also found former Countrywide executive Rebecca Mairone guilty of fraud. As TheStreet first reported, Mairone is now at JPMorgan Chase (JPM).

"Almost a year to the day after we brought suit, a unanimous jury has found Countrywide, Bank of America, and senior executive Rebecca Mairone liable for making disastrously bad loans and systematically removing quality checks in favor of its own balance. As demonstrated at trial, they adopted a program that they called "the Hustle," which treated quality control and underwriting as a joke," read a statement from Preet Bharara, attorney for the U.S. Southern District of New York.

"The jury's decision concerned a single Countrywide program that lasted several months and ended before Bank of America's acquisition of the company. We will evaluate our options for appeal," said Bank of America spokesman Lawrence Grayson.

"We are reviewing the situation," wrote JPMorgan spokeswoman Amy Bonitatibus, in an email to TheStreet.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,072.05 +41.84 0.23%
S&P 500 2,090.57 +8.69 0.42%
NASDAQ 4,801.1760 +27.7040 0.58%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs