BofA $1.5B Verdict Tossed Out

A San Francicso appeals court overturns the 2004 ruling, according to a report.
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San Francisco's 1st District Court of Appeals late Monday overturned a $1.5 billion judgment against

Bank of America

(BAC) - Get Report

, saying that the bank did not violate California banking laws affecting seniors.

According to a published report, the class-action case suit was brought against BofA in 2004 on behalf of 1.3 million senior citizens for allegedly taking money from direct deposit accounts set up to receive Social Security benefits.

A jury and judge found that the bank's actions, collecting fees for check overdrafts and direct deposit accounts set up to receive Social Security benefits, violated California laws that prohibited banks from taking Social Security benefits to recover customer debts, the

Associated Press

said.

But the appeals court ruled that BofA did not breach state banking laws affecting seniors, as jurors were led to believe, saying the lawsuit misapplied a 1974 California Supreme Court decision that outlawed banks from using deposited public benefits to pay the account holder's separate credit card account, the report said.

Plaintiffs' attorney James Sturdevant who called the decision "absolutely wrong," said he would appeal the case to the California Supreme Court, the report said.

BofA spokeswoman Shirley Norton said that "Bank of America maintained all along that it acted lawfully and followed standard banking practice maintaining and balancing customer accounts,"

AP

said.

Earlier Monday, BofA boosted its wealth management business with a $3.3 billion acquisition of

US Trust

from

Charles Schwab

(SCHW) - Get Report

.

Shares of Bank of America closed the regular session up a nickel to $54.90.