Hapoalim says Bank of America, Merrill Lynch and Countrywide
published misleading or incomplete information when selling it assets. According to haaretz.com Bank Hapoalim has filed a massive $720
million suit against Bank of America, Merrill Lynch and Countrywide over its
losses in the U.S. subprime crisis, alleging that the U.S. institutions misled
and defrauded it.
Among Israel's financial institutions, Hapoalim suffered the
worst losses in the subprime crisis due to its investments in mortgage-backed
securities. Between 2005 and 2007, the
bank snapped up mortgage-backed securities in an attempt to meet its goal of a
15% return on equity by 2007. By the end of that year, the bank had invested
$3.65 billion in such securities.
In 2008, Hapoalim booked a NIS 3.9 billion loss due to its
investments in instruments including credit-default swaps, mortgage-backed
securities and structured investment vehicles - all complex, poorly understood
instruments that nosedived during the crash. The losses were on assets Hapoalim
bought from Bank of America, Merrill Lynch, Countrywide and other financial
institutions. Hapoalim is considering filing suits against these other
companies as well. It filed its suit
against Bank of America, the United States' second-largest bank, two weeks ago
in Manhattan federal court...
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