BOSTON – Massachusetts securities regulators said on Friday that they were subpoenaing Bank of America for documents to determine if the lender knowingly overvalued assets in certain investment products.
Local investors lost about $150 million in investment vehicles structured by Banc of America Securities LLC, said William Galvin, the state’s top securities regulator.
Now his office is asking the Charlotte, N.C.-based bank to supply documents for its activities involving collateralized loan obligations.
The CLOs include LCM VII Ltd. and Bryn Mawr CLO II Ltd., which were structured by the bank and sold to investors in 2007.
Galvin, who has been especially aggressive in looking into how big banks hurt small investors during the housing crisis and financial crisis, said he wanted to find out if the issuer “was knowingly overvaluing assets in the portfolio to get them off their books and onto investors.”
The news comes one day after Bank of America and other large lenders agreed to a $25 billion settlement over alleged foreclosure abuses.
There was no immediate comment from Bank of America.
The company’s shares were down 1.2 percent at $8.08 in afternoon New York Stock Exchange trading.