(Updates with judge’s ruling in second paragraph.)
Nov. 21 (Bloomberg) -- The New York and Delaware attorneys general may participate in litigation over Bank of America Corp.’s proposed $8.5 billion settlement with mortgage investors, a federal judge ruled, rejecting arguments by Bank of New York Mellon Corp., trustee for the mortgage bond trusts.
U.S. District Judge William Pauley in Manhattan, who is overseeing the case, approved requests to intervene by New York Attorney General Eric Schneiderman and Delaware Attorney General Beau Biden, according to an order filed Nov. 18.
“This action concerns far more than the financial interests of a few sophisticated investors,” the judge wrote. “And the intervention of the state AGs in this action will protect the interests of absent investors.” Bank of New York had argued Biden didn’t have a right to intervene.
Bank of America has agreed to settle with investors in Countrywide Financial Corp. mortgage-backed securities. The deal was reached with an institutional investor group that includes BlackRock Inc. and would apply to investors outside that group.
The case is Bank of New York Mellon v. Walnut Place LLC, 11-cv-05988, U.S. District Court, Southern District of New York (Manhattan).
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