U.S. News

Bank of America Enters Pacts With Justice Department, IRS


Bank of America said on Friday it entered a leniency agreement with the U.S. Department of Justice related to the department's probe into the municipal derivatives industry, allowing the bank to avoid the potential for criminal prosecution.

Separately, Bank of America agreed to a $14.7 million settlement with the Internal Revenue Service over the bank's role in providing guaranteed investment contracts and other agreements related to "blind pool" bond transactions. The Charlotte, N.C.-based company said it did not admit liability under the Internal Revenue Code.

Bank of America said the Justice Department's leniency program grants amnesty to the first company that reports certain activity before to the start of an investigation.

The bank said that, under the amnesty agreement, it will not face any criminal antitrust prosecution related to matters it reports, so long as it continues to cooperate. Bank of America said it is cooperating with the Justice Department, the IRS and the Securities and Exchange Commission.

Guaranteed investment contracts are issued by insurers and offer guaranteed rates of return for specified periods. Many retirement plans include them.