New York State's attorney general is on the march again. This time against Bank of America (NYSE:BAC) for potential securities violations committed during the housing boom. Good grief. How much more can one bank take?
One busy guy
Eric Schneiderman's latest investigation was revealed in a Thursday SEC filing by B of A. According to Bloomberg News, Schneiderman is "probing the [bank's] purchase, securitization and underwriting of home loans and mortgage securities."
Last October, it was revealed that Schneiderman was coming after JPMorgan Chase (NYSE:JPM) for securities fraud committed by its Bear Stearns unit in the run-up to the financial crisis. In yesterday's SEC filing, B of A said it "'continues to cooperate fully' with the investigation."
The gift that keeps on giving
Less than two months ago, B of A agreed to pay more than $10 billion to government-run housing giant Fannie Mae to settle allegations over troubled mortgages. In 2012, the superbank agreed to pay $1 billion to the federal government over subprime loans generated by Countrywide, and $11.8 billion to a nationwide settlement over foreclosure abuses.
When the $10 billion January settlement was reached, some B of A bulls declared it to be the last the bank and its investors would ever hear about the financial crisis: that this massive bill due for financial crisis missteps and misdeeds would be the final bill due.
I said it then, and I'll say it again now: The big banks haven't heard the last of the financial crisis. If JPMorgan and B of A remain susceptible to Schneiderman's investigations, surely Citigroup (NYSE:C) and maybe even Wells Fargo (NYSE:WFC) do, too: both banks did massive amounts of housing-boom lending.
But maybe nothing will come of this latest crisis-related B of A eruption. Maybe New York's attorney general will find that all of the bank's books are in perfect order. Speaking of New York, if you believe that, I have a bridge you might be interested in buying.