Bank of America Pulls a $10.7 Billion Lehman-Esque Oopsie, Claims No Material Effect
Courtesy of Jr. Deputy Accountant
Oh that’s precious. What sort of money does Bank of America have to claim $10.7 billion in misclassified cash non-material?
Bank of America Corp is beefing up its internal accounting controls after it incorrectly classified as much as $10.7 billion in short-term lending and repurchase deals for mortgage securities as sales, according to a letter filed on Friday with U.S. securities regulators.
The Charlotte, N.C.-based lender said the transactions — spread over a three-year period — were immaterial to Bank of America’s earnings in a May 13 letter to the U.S. Securities and Exchange Commission, which was publicly filed on Friday.
The error was first disclosed in the bank’s first quarter 2010 report, which noted the bank incorrectly accounted for some mortgage-backed securities as sales, rather than repurchase or short-term lending deals.
The first such error occurred on March 31, 2007, totaling $4.5 billion in securities. The largest misclassification was $10.7 billion in securities on September 30, 2008.
"The transactions did not have a material impact on the bank’s earnings or balance sheet," said company spokesman Jerry Dubrowski.
Ahem PricewaterhouseCoopers, do you have something to confess here? Is it not your job to spot these sorts of errors BEFORE you sign off on BofA’s financials? Just curious.
