|  | | 2010 News and Press Releases | | |
SETTLEMENT NEWS:
Judge Accepts S.E.C.’s Deal With Bank of America
Louise Story
The New York Times. February 23, 2010
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EXCERPT: In a ruling that freed Bank of America from some of its legal problems, a federal judge on Monday “reluctantly” approved a $150 million settlement with the Securities and Exchange Commission. But even as the judge, Jed S. Rakoff of the Southern District of New York, approved the settlement, he delivered harsh words for the S.E.C., saying that the agreement was “half-baked justice at best.” The settlement stems from the bank’s merger with Merrill Lynch, the firm known for its thundering herd of brokers, at the height of the financial crisis. In the months before the deal closed, Bank of America did not tell its shareholders about Merrill’s hefty bonus payouts or the mounting losses that eventually led to a second government bailout of $20 billion. In a written opinion released Monday morning, Judge Rakoff declared that the evidence showed that the bank failed to adequately disclose the bonuses and the losses, but he said it was unclear if the lack of disclosure resulted from negligence or ill-intent. The judge, known for his maverick ways, said the settlement amount was “paltry,” but he said the deal — the second one the S.E.C. proposed — had met his minimum threshold for approval. “This court, while shaking its head, grants the S.E.C.’s motion and approves the proposed consent judgment,” the judge wrote. The court order ends a seven-month saga that began in August when the judge rejected the S.E.C.’s first settlement, which would have forced the bank to pay $33 million in penalties and included only a slim statement of facts in the case. It was, the judge said in his latest ruling, a “vacuous proposal.” The S.E.C. was forced to come up with something more substantial in order to avoid a March 1 trial date that Judge Rakoff had set. |
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