Bank of America Corp. received negative attention on a pair of fronts last week.
The Charlotte company received a Wells notice Feb. 4 from the Securities and Exchange Commission, which has been investigating B of A and several other companies over allegations of bid rigging on financial products sold to local government agencies, Bloomberg News reported Friday.
Dexia SA's Financial Security Assurance Holdings Ltd. also received a notice on Feb. 4.
B of A is one of more than a dozen institutions that were subpoenaed in November 2006 by the SEC and U.S. antitrust regulators investigating allegations of bid rigging.
Last year B of A agreed to cooperate with the Justice Department in exchange for leniency.
Also Friday, Dow Jones reported that the hedge fund Institutional Credit Partners LLC, sent B of A a letter last week alleging the company and one of its clients, the Toronto insurer Fairfax Financial Holdings Ltd., misrepresented the nature of an off-balance-sheet transaction that helped Fairfax save $400 million in taxes over three-and-a-half years.
In March 2003, Fairfax purchased enough shares of its Odyssey Re Holdings Corp. to consolidate it for tax purposes.
But according to ICP, the "purchase" was nothing more than a loan disguised as a sale.
The fund contends that Fairfax and B of A misled securities regulators about the nature of the transaction, and that B of A failed to disclose a large short position in Odyssey Re stock to the New York Stock Exchange.
Fairfax has filed a suit in a New Jersey state court alleging that ICP and several other hedge funds conspired to denigrate its business and depress its stock price.
B of A said in an e-mail, "We are confident we have complied with all laws and reporting requirements related to this transaction."
Fairfax said the transaction "was appropriate in all respects."
