The FBI and the U.S. Justice Department are conducting a criminal investigation into Bank of America’s (NYSE:BAC) acquisition of Merrill Lynch, the Charlotte Observer reported on Friday, citing a source familiar with the matter.
The criminal probe, which will likely add more scrutiny in a year-long wave of legal problems for the Charlotte-based bank, has been underway for six months, the newspaper said.
Bank of America already faces investigations from the New York Attorney General’s office, the SEC and the N.C. Attorney General’s office. Those probes are primarily focused on whether BofA failed to disclose to shareholders Merrill’s ballooning 4th-quarter operating losses and bonus payments before the merger was approved.
The previously disclosed investigations of the bank have appeared to largely involve civil matters. The FBI’s involvement however, opens up the possibility of criminal charges, although the scope and potential outcome of the probe remain unknown, the paper said.
BofA spokesman Jim Mahoney declined to confirm whether the FBI or Justice Department were investigating the bank, but he said there are “various government agencies that are continuing to look at the issues associated with Merrill.” He said the agencies extend beyond the SEC and the New York and N.C. attorneys general. In recent filings with the SEC, Bank of America disclosed that it was cooperating with various investigations from governmental authorities but gave no specifics.
Bank of America shares are up 10 cents at $17.71 in morning trading on the NYSE.