California reportedly subpoenas BofA over toxic securities.. LA Times

http://www.latimes.com/news/local/la-fi-bank-america-harris-20111020,0,7737925.story

California is trying to determine whether BofA and its Countrywide Financial subsidiary sold investments backed by risky mortgages to investors in California under false pretenses, a source says.October 20, 2011

Investigators with the state attorney general's office have subpoenaed Bank of America Corp. in connection with the sale and marketing of troubled mortgage-backed securities to California investors, according to a person familiar with the probe.

The state is trying to determine whether the bank and its Countrywide Financial subsidiary sold investments backed by risky mortgages to institutional and private investors in California under false pretenses, according to the person, who was not authorized to speak publicly and requested confidentiality.

The subpoenas, which were served Tuesday, come as talks continue for a broad foreclosure settlement by a coalition of state attorneys general and federal agencies. California walked away from those discussions with major banks more than two weeks ago, saying what the banks were offering was not enough and the state would pursue its own investigations.

California has left the door open to signing on to a bigger settlement, and the BofA subpoenas were seen as a move to exert further pressure on the bank. The person familiar with the matter would not say how much the securities in question cost investors.

That cat is permanently out of the bag and on public display, and it's an election year.

As the article says, California left the "super committee" to resolve the bank deal two weeks ago. This is a State action, not Federal.

-- Mal