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Prosecutors ask appeals panel to rehear Bank of America case

NEW YORK, N.Y. – Prosecutors are asking a federal appeals panel to reconsider its reversal of a fraud verdict against Bank of America Corp. that led to a penalty of over $1.2 billion.

Prosecutors filed papers with the 2nd U.S. Circuit Court of Appeals in Manhattan late Thursday. The government said the three-judge appeals panel overlooked “a wealth of evidence” that the bank sold thousands of toxic mortgage loans while misrepresenting them as investment quality.

It said a recent Supreme Court ruling clarified law affecting the fraud case.

In May, the appeals panel reversed a jury’s finding that Bank of America and its Countrywide Financial unit committed fraud by misleading government housing agencies Fannie Mae and Freddie Mac in late 2007 and 2008. The ruling vacated a $1.27 billion penalty.

Bank of America declined comment Friday.