Um, the SEC Was Going to Settle with Bank of America But Got Busted
Boston Business Journal:
The Securities and Exchange Commission says it will “vigorously pursue” Bank of America Corp. in court with allegations that the bank misled shareholders when it prepared to purchase Merrill Lynch & Co. late last year.
The SEC and BofA reached a settlement on the charges last month that required the bank to pay a $33 million fine. But U.S. District Judge Jed Rakoff rejected the deal, saying the corporate fine would further punish shareholders, not the persons suspected of misleading investors.
Charlotte, N.C.-based BofA (NYSE:BAC) is accused of allowing Merrill to pay more than $3 billion in bonuses to its employees before the merger, but leading investors to believe such bonuses would not be paid. Both Bank of America and Merrill Lynch have substantial footprints in Massachusetts, ranking as the Bay State's largest bank and brokerage firms, respectively.
After Rakoff rejected the proposed settlement, the SEC had to consider whether to drop the charges, submit a new settlement or proceed to court. The agency’s statement late Monday means BofA management will likely be required to defend its actions in open court.
Quote the raven:
“We firmly believe that the settlement we submitted to the court was reasonable, appropriate and in the public interest. As we consider our legal options with respect to the court’s ruling, we will vigorously pursue our charges against Bank of America and take steps to prove our case in court. We will use the additional discovery available in the litigation to further pursue the facts and determine whether to seek the court’s permission to bring additional charges in this case.
“In deciding how to proceed, we will, as always, be guided by what the facts warrant and the law permits.”
Why the sudden change of tune, SEC? Why not ask Judge Rakoff if he'll let you settle for $34 million? Or $35 million? Or $50 million? Did you ask?