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Justice sues Bank of America over mortgage securities

The Justice Department sued Bank of America on Tuesday, accusing the bank of defrauding investors by vastly underestimating the quality of mortgage-backed securities.

The lawsuit is the latest action by President Barack Obama’s federal mortgage task force that has vowed to hold Wall Street accountable for misconduct in the packaging and sale of mortgage securities during the housing boom.

Bank of America, the Justice Department said, cloaked the risk associated with $850 million worth of securities backed by residential mortgages. In a corporate filing last week, Bank of America said it was bracing for the action.

As Bank of America assembled securities in 2008, the government claimed, the bank ignored that more than 40 percent of the mortgages included did not meet underwriting guidelines. Even though Bank of America knew about the troubled mortgages, the government said, the bank sold the securities anyway.

Unlike other lawsuits, this case zeros in on prime mortgages, rather than subprime loans, the mortgages that became a hallmark of the 2008 financial crisis.

—Jessica Silver-Greenberg, The New York Times

Court-martial begins in Fort Hood killings

KILLEEN, Texas — Nearly four years after going on a deadly shooting rampage at the Fort Hood Army base here in 2009, Maj. Nidal Malik Hasan told a jury of senior Army officers Tuesday that “the evidence will clearly show that I am the shooter.”

Three weeks before he was to deploy to Afghanistan, Hasan opened fire inside the Soldier Readiness Processing Center on Nov. 5, 2009, shooting unarmed soldiers and commissioned officers as they tried to hide under desks and tables. His assault left 13 dead and more than 30 others wounded. He wounded at least two by shooting them in the back as they tried to flee the building or take cover.

Hasan has been charged with 13 counts of premeditated murder and 32 counts of attempted premeditated murder.

Despite the evidence of Hasan’s self-radicalization, Army prosecutors do not have to prove that he was a homegrown terrorist. He faces not terrorism but murder charges, and prosecutors have to prove only that he acted with intent and premeditation.

—Manny Fernandez, The New York Times

Order by Al-Qaid

WASHINGTON - The Obama administration’s decision last week to close nearly two dozen diplomatic missions and issue a worldwide travel alert came after the United States intercepted electronic communications in which the head of al-Qaida ordered the leader of the group’s affiliate in Yemen to carry out an attack as early as this past Sunday, according to U.S. officials.

The intercepted conversations last week between Ayman al-Zawahri, who succeeded Osama bin Laden as the head of the global terrorist group, and Nasser al-Wuhayshi, the head of the Yemen-based al-Qaida in the Arabian Peninsula, revealed what U.S. intelligence officials and lawmakers have described as one of the most serious plots against U.S. and Western interests since the attacks on Sept. 11, 2001.

Counterterrorism analysts, as well as former intelligence official, said closing the embassies - and depriving al-Qaida of targets, at least for now - may have deterred an attack.

“The announcement itself may also be designed to interrupt al-Qaida planning, to put them off stride,” Michael V. Hayden, a former CIA director, said on Fox News Sunday.

—Eric Schmitt and Mark Mazzetti, The New York Times