Bank of America Corp.'s Countrywide unit won preliminary approval for a $500 million settlement of a class-action lawsuit by investors, including pension funds, who claimed they were duped into buying its residential mortgage-backed securities.
U.S. District Judge Mariana Pfaelzer said at a hearing Thursday in Los Angeles that she will give preliminary approval to the settlement once the plaintiffs' lawyers have prepared a new proposed order for her.
At a hearing on July 10, the judge said she wanted more information about how the money from the accord would be distributed among investors of different tranches of the securities. She also asked for a letter alerting lawyers for investors who filed separate cases against Countrywide that their claims could be wiped out by the settlement.
“All the elements are in place for preliminary approval,” Ms. Pfaelzer said.
Bank of America announced April 17 that it had reached a settlement with investors in three class actions.