Bank of America and U.S. Bank are nearing a settlement agreement with a Chicago pension fund over charges that the banks failed to protect investors from losses during the financial crisis.
The charges stem from an April 2012 lawsuit filed by the Policemen's Annuity & Benefit Fund of the City of Chicago. The suit charged the banks with failing to provide adequate oversight of trusts that contained securities backed by bad loans. The extent of the losses claimed was not immediately clear from court filings.
The securities in question were sold to investors by Washington Mutual, which failed in September 2008 and is now part of JPMorgan Chase.
"We are pleased to report that the parties' counsel have agreed on the terms and language of a settlement stipulation that they are now prepared to recommend to their clients," James Rutten, an attorney for Bank of America, wrote in an Oct. 30 letter to Katherine Forrest, a judge in New York's Southern District. The letter did not disclose the cost of the settlement.
Rutten expects the parties to reach an agreement by Nov. 7, he said in the letter.
Spokespeople for the two banks declined to comment. An attorney with the law firm representing the Policemen's Annuity did not immediately respond to a request for comment.