Bank of America will spend $9.33 billion to resolve a dispute over mortgage securities with the Federal Housing Finance Agency, the regulator that oversees Fannie Mae and Freddie Mac.
The agency sued 18 financial institutions in 2011 over their sales of mortgage securities to Fannie and Freddie. It alleges many banks falsely represented the mortgage loans behind the securities. These soured after the housing bubble burst and lost billions of dollars in value.
Bank of America said it will make cash payments of about $6.3 billion and buy securities from Fannie and Freddie worth more than $3 billion. It is one of several banks to settle with the FHFA, which announced the agreement Wednesday.
Separately, New York’s attorney general said Bank of America and its former chief executive, Kenneth Lewis, reached a $25 million settlement to end an investigation into their actions in the 2008 acquisition of Merrill Lynch.
The civil fraud lawsuit accused them of failing to disclose Merrill losses and bonuses before the deal closed. The settlement requires the bank to pay $15 million. Lewis, 67, is prohibited for three years from serving as an officer or director of a public company. He was ordered to pay $10 million.
— Associated Press
King Digital Entertainment, maker of the “Candy Crush” smartphone game, suffered the biggest decline of a newly listed U.S. company in more than four months even after it priced its shares at a discount to its major peers.
King’s shares dropped nearly 16 percent to end trading at $19 on Wednesday. King and shareholders Apax Partners and Index Ventures raised $500 million in the initial public offering after pricing the stock at $22.50.
At the IPO price, King was valued at $7.09 billion, which made it cheaper — relative to projected sales — than publicly traded peers including Giant Interactive Group and Zynga. That had investors betting they could profit from a quick jump in the shares once they began trading, said Jeffrey Sica of Sica Wealth Management of Morristown, N.J. Instead, concern that the popularity of “Candy Crush” will wane is weighing on the shares, he said.
The drop was the worst of any U.S. IPO since textbook renter Chegg slumped 23 percent in mid-November.
— Bloomberg News
● A federal judge in California has dismissed a proposed class action lawsuit against Facebook that had accused the company of misappropriating the names and likenesses of minors who use the social network. At issue was Facebook’s use of minors’ names and photos in targeted advertising in a case that highlighted privacy concerns. U.S. District Judge Richard Seeborg ruled that the minors gave their consent when they signed up for Facebook under a “statement of rights and responsibilities” that governs the site.
● Amazon.com will drop prices on most of its cloud computing services starting April 1, the largest U.S. online retailer said a day after rival Google announced a similar price cut. Amazon’s price cuts range from 10 percent to 65 percent, Andrew Jassy, senior vice president of Amazon Web Services, told a conference for Amazon Web developers in San Francisco. The company also said the Defense Department deemed that Amazon’s cloud computing service is secure enough to be used more broadly within the department. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.)
● Creditors of bankrupt bitcoin exchange Mt. Gox asked a federal judge in U.S. Bankruptcy Court in Dallas to order the firm’s principal, Mark Karpeles, to come to the United States to face questioning as they seek permission to pursue a fraud lawsuit. Creditors Gregory Greene and Joseph Lack are trying to strip Mt. Gox of the temporary protection it enjoys from lawsuits in the United States while in bankruptcy. Karpeles has agreed to be questioned only in Taipei in April, with a video link for people unable to travel to the Taiwanese city.
● Between nine and 18 barrels (378 to 756 gallons) of oil spilled into Lake Michigan from BP’s Whiting refinery in Indiana on Monday, the U.S. Coast Guard confirmed Wednesday. The amount of oil spilled is based on an initial visual estimate and may change, a Coast Guard spokesman said.
— From news services
● 8:30 a.m.: Revised fourth-quarter gross domestic product and weekly jobless claims.
● 10 a.m.: Pending home sales index for February and weekly mortgage rates.