Business News Roundup, May 24

Bank of America Corp. was not liable for fraud and subject to a penalty of more than $1.2 billion for its actions before the economy collapsed in 2008 despite a jury’s finding to the contrary, a federal appeals court ruled Monday.

The 2nd U.S. Circuit Court of Appeals in Manhattan said there was insufficient evidence for a jury to conclude at a 2013 trial that mail and wire fraud was committed by the bank’s Countrywide Financial unit in late 2007 and 2008 when it passed along mortgages to government housing agencies Fannie Mae and Freddie Mac.

Prosecutors had alleged that the bank sold mortgages at break-neck speed without regard to quality as the economy hurtled toward one of the nation’s worst financial downturns.

In July 2014, U.S. Attorney Preet Bharara touted the jury verdict and subsequent civil penalty as the first time a bank or its executives had been found liable under federal law for mortgage fraud leading up to the financial crisis.

The three-judge panel, in a ruling written by Circuit Judge Richard C. Wesley, said trial evidence came up short.

The appeals court said the claims arose in 2012 after a former employee of Countrywide sued the company, alleging that a division of Countrywide Home Loans that had specialized in subprime loans acted fraudulently after it transformed itself into a prime origination division after the subprime market collapsed in 2007.

After a jury found the bank and an employee liable, the trial judge imposed a $1.27 billion penalty against the bank and a $1 million penalty against an executive who oversaw the creation of a loan origination process called the “High Speed Swim Lane” beginning in August 2007.

The U.S. government announced this month that 17 automakers — including Toyota — are adding 35 million to 40 million Takata inflators to the 28.8 million that have already been recalled after multiple investigations showed more vehicles could be affected.

Vermont is poised to become the first state to require public and private health insurance to cover vasectomies without copays and deductibles under a bill Democratic Gov. Peter Shumlin signed into law Monday.

The legislation inserts mandates from the federal Affordable Care Act but goes beyond them to include additional birth control methods, such as vasectomies.

Regional Planned Parenthood President Meagan Gallagher added, “The ability to plan, prevent and space pregnancies directly benefits women, men, children and society through increased educational and economic opportunities for women, healthier babies, more stable families, and, as a result, a reduced taxpayer burden.”