Bank of America would pay $150 million and strengthen its corporate governance and disclosure practices under a proposed settlement filed today with the U.S. District Court for the Southern District of New York by the Securities and Exchange Commission.
Bank of America would pay $150 million and strengthen its corporate governance and disclosure practices under a proposed settlement filed today with the U.S. District Court for the Southern District of New York by the Securities and Exchange Commission.
The SEC previously filed two sets of charges in the court in Manhattan alleging that Bank of America filed to disclose material information to shareholders prior to a vote to approve Bank of America's merger with Merrill Lynch & Co.
U.S. District Judge Jed Rakoff must approve the settlement filed today. The judge earlier rejected a $33 million settlement between the SEC and Bank of America stemming from the Merrill acquisition.
In that ruling, Mr. Rakoff 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."
Mr. Rakoff ruled that the proposed settlement "cannot remotely be called fair," and ordered that the case go to trial.
The move was unprecedented. While judges on occasion have sent back proposed settlements to the SEC, ordering them to be renegotiated, experts said, throwing an accord out entirely breaks legal ground.
