The Federal Deposit Insurance Corp. (FDIC) filed a petition against the $8.5 billion settlement related to losses on Bank of America MBS.
The FDIC's objection comes after a similar but seperate petition was filed earlier this month by a group of bond investors who claimed the settlement is unfair. The bond investors include the Walnut Place group of 11 buysiders, several federal home loan banks, pension funds, and insurers. They originally filed a petition to intervene in the New York state court, the report said.
The FDIC owns securities that are covered by the settlement and said it doesn’t have sufficient information to evaluate the accord, according to a filing made yesterday in a Manhattan federal court.
“While the FDIC generally does not comment on pending litigation, this filing is simply a formal notice to preserve our right to make claims as a part of the settlement and seeks additional information to evaluate those potential claims," said Andrew Gray, director of FDIC's office of public affairs. "It is not an evaluation or opinion on the settlement itself.”
A New York state judge was scheduled to consider approving the BofA settlement in November. However, last week the investors said that the size of the case qualified it for a mass action and could therefore move its claim to federal courts jurisdiction.