AP: Cuomo Is Preparing Charges Against Bank Of America Execs
Judge Overturns Bank Of America-SEC Settlement Over Merrill Bonuses
NEW YORK — A federal judge on Monday rejected a $33 million settlement between the Securities and Exchange Commission and Bank of America Corp., saying the SEC's accusations of inadequate disclosure by the bank over bonuses paid at Merrill Lynch must now go to trial.
Separately, New York Attorney General Andrew Cuomo's office is preparing to file charges within the next couple of weeks against several high-ranking executives at Bank of America, claiming they failed to disclose details about the bank's acquisition of Merrill Lynch, according to a person familiar with the investigation.
The ruling in the SEC case comes one month after the agency and Bank of America thought they had put a thorny issue behind them, and leaves the SEC with the task of mounting a case against BofA over one of the most sensitive issues of the financial crisis – executive pay on Wall Street.
The SEC announced last month that it had settled its civil charges against BofA, which agreed to buy the New York investment bank last year, without the bank admitting or denying guilt in the case. BofA has said it didn't violate disclosure rules.
U.S. District Judge Jed Rakoff held up his approval of the settlement, however, and ordered the SEC last month to explain why it didn't pursue charges against specific executives at Bank of America over the accusations.
Rakoff, in his ruling, found that the settlement "suggests a rather cynical relationship between the parties: the SEC gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger, the bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth."
Cuomo's office is likely to file civil charges against the executives over their role in failing to alert shareholders to mounting losses and accelerated bonus payments at Merrill, said the person, who requested anonymity because no charges have been filed yet.
The AG's office has also questioned whether Bank of America failed to tell shareholders about its consideration of backing out of the deal and mounting write-downs at one of Merrill's mortgage lending subsidiaries. LinkHere
Separately, New York Attorney General Andrew Cuomo's office is preparing to file charges within the next couple of weeks against several high-ranking executives at Bank of America, claiming they failed to disclose details about the bank's acquisition of Merrill Lynch, according to a person familiar with the investigation.
The ruling in the SEC case comes one month after the agency and Bank of America thought they had put a thorny issue behind them, and leaves the SEC with the task of mounting a case against BofA over one of the most sensitive issues of the financial crisis – executive pay on Wall Street.
The SEC announced last month that it had settled its civil charges against BofA, which agreed to buy the New York investment bank last year, without the bank admitting or denying guilt in the case. BofA has said it didn't violate disclosure rules.
U.S. District Judge Jed Rakoff held up his approval of the settlement, however, and ordered the SEC last month to explain why it didn't pursue charges against specific executives at Bank of America over the accusations.
Rakoff, in his ruling, found that the settlement "suggests a rather cynical relationship between the parties: the SEC gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger, the bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth."
Cuomo's office is likely to file civil charges against the executives over their role in failing to alert shareholders to mounting losses and accelerated bonus payments at Merrill, said the person, who requested anonymity because no charges have been filed yet.
The AG's office has also questioned whether Bank of America failed to tell shareholders about its consideration of backing out of the deal and mounting write-downs at one of Merrill's mortgage lending subsidiaries. LinkHere
posted by Kangaroo Brisbane Australia at 5:12 PM
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