2015
08/28

Category:
Mortgages

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Bank of New York Mellon (BK) Stock Down on Faulty Mortgages Lawsuit

NEW YORK (TheStreet) –Bank of New York Mellon (BK – Get Report) stock is declining 3.12% to $42.80 on heavy trading volume on Thursday afternoon, after the Federal Deposit Insurance Corp sued the financial company over the sale of $2.06 billion in mortgage-backed securities to a failed bank, Reuters reports.

The FDIC alleges Bank of New York Mellon failed to protect its investors in its role as bond trustee leading the US regulator to lose more than $440 million when it sold the securities in 2010 in its role as receiver for the shuttered Guaranty Bank.

Guaranty Bank closed in 2009 and its deposits were assumed by a US division of Banco Bilbao Vizcaya Argentaria (BBVA), Reuters added.

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