Kentucky pension system recovers $23 million in Bank of America - wave3.com-Louisville News, Weather & Sports

Kentucky pension system recovers $23 million in Bank of America settlement

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Kentucky Attorney General Jack Conway and other attorneys general announced a $17 billion settlement reached with Bank of America Kentucky Attorney General Jack Conway and other attorneys general announced a $17 billion settlement reached with Bank of America
U.S. Attorney General Eric Holder U.S. Attorney General Eric Holder

WASHINGTON, D.C. (WAVE) - Bank of America Corporation agreed to a nearly $17 billion settlement Thursday, which includes $23 million to be returned to the Kentucky Retirement Systems. The settlement stems from a civil investigation into the bank's issuance of high-risk investment products which collapsed in value, causing investors to lose billions of dollars.

[RELATED STORY: Bank of America agrees to nearly $17B settlement]

Kentucky Attorney General Jack Conway joined five other state attorneys general and the U.S. Department of Justice in making the announcement. "The conduct of Bank of America was deplorable and driven by greed," Conway said.

U.S. Attorney General Eric Holder said the bank and its Countrywide and Merrill Lynch subsidiaries had "engaged in pervasive schemes to defraud financial institutions and other investors" by misrepresenting the soundness of mortgage-backed securities.

The bank admitted that it did not disclose important information about the risky investments. Investors, including several public pension funds, lost billions of dollars when the value of residential mortgage-backed securities collapsed.

Gov. Steve Beshear thanked Conway for his work to recover the money for Kentucky's pension system saying the money will strengthen the system for the thousands of retirees who depend on it.

The $17 billion settlement is by far the largest civil settlement with a single entity in American history. The deal calls for the bank, the second-largest in the U.S., to pay a $5 billion cash penalty, another $4.6 billion in remediation payments and provide about $7 billion in relief to struggling homeowners.

Reports from the Associated Press were used in this story.

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