Twice last year BofA attorneys tried to get their settlement with the SEC approved by federal judge Jed Rakoff, who refused to sign off on the $33 million agreement because he considered it too small a punishment. The case stemmed from allegations brought by SEC lawyers that BofA tried to hide billion-dollar bonuses to Merrill Lynch executives from bank shareholders. In an effort to meet Rakoff’s concerns, the bank has now agreed to pay the SEC $150 million to settle matters. Rakoff will decide today (February 8) whether he approves the new deal.

 

Even if BofA can get the SEC case over with, it now will have to contend with Cuomo’s lawsuit against former CEO Kenneth Lewis and Joe Price, the bank’s chief financial officer when the Merrill deal was struck. Lewis resigned last year over fallout from the merger, and Price was demoted from CFO. Cuomo’s case echoes the allegations brought by the SEC, that BofA’s leaders “misled its shareholders by not disclosing massive losses that were mounting at Merrill Lynch so that shareholders would vote to approve the deal.”

-Noel Brinkerhoff

 

Bank of America Settles with SEC, but Faces Fraud Claim from New York AG (Courthouse News Service)

Cuomo Sues Bank of America, Even as It Settles with S.E.C. (by Louise Story, New York Times)