Court won't reconsider scrapping $1.2bn Bank of America fine

People and tourist walking by the colorful electronic sign of Bank of America

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Judges for the Second US Circuit Court of Appeals in New York said in a filing that they had considered the Justice Department’s request and would deny it. The judges didn’t elaborate on their decision.

The case centred on a mortgage program known as the “Hustle” at lender Countrywide Financial, which Bank of America bought in 2008. The US attorney’s office in Manhattan sued the bank in 2012, and a jury the following year found the bank liable for fraud.

In May, a three-judge panel from the Second Circuit tossed out the verdict and the accompanying $ 1.27 billion fine, saying the government hadn’t proven that the bank’s actions amounted to fraud.

Earlier this month, the Justice Department asked that court to reconsider, saying the court had “overlooked a wealth of evidence”.

The appellate court also threw out a fraud verdict and $ 1 million penalty against former Countrywide executive Rebecca Mairone, one of the few individuals to be held accountable for the financial crisis. In an interview with The Wall Street Journal, Mairone, who now goes by Rebecca Steele, said she had done nothing wrong and denied any mistakes in Hustle.

“We’re very happy with the decision,” Marc Mukasey, Steele’s lawyer, said on August 22.

The government could ask the Supreme Court to consider the case. A spokesman for the Manhattan US attorney’s office declined to comment.

Throughout the trial and its appeal, Bank of America denied wrongdoing. A spokesman declined to comment Monday.

Write to Christina Rexrode at christina.rexrode@wsj.com

Aruna Viswanatha contributed to this article, which was published by The Wall Street Journal

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