Sunday, August 30, 2009
Judge Jed Rakoff still isn’t satisfied. The federal judge who refused to accept the settlement between Bank of America and the Securities and Exchange Commission (SEC) over attempts to hide the payment of billion-dollar bonuses from bank shareholders balked again at signing off on a $33 million fine for BofA. Both sides in the matter tried to convince Rakoff the settlement was fair and just, but the judge said he has problems with what BofA lawyers have said—and not said—in their briefs and arguments before the court, and with the SEC’s decision not to pursue more actions against the bank.
After reviewing the briefs he requested, Rakoff said the documents raised “additional issues,” including the SEC’s “puzzling” choice not to press charges over BofA’s failure to disclose to shareholders the payment of $5.8 billion to Merrill Lynch officials. SEC lawyers claimed they couldn’t investigate BofA executives because they had merely done what bank attorneys advised. Rakoff refused to swallow this explanation, and added that, if nothing else, the SEC should at least pursue actions against BofA’s attorneys.
Round three will take place on September 9, the date Rakoff has ordered both sides to return to court and provide more answers.
-Noel Brinkerhoff
Judge Wants SEC, BofA to Explain $33M Settlement (by Nick Divito, Courthouse News Service)
SEC v. Bank of America (U.S. District Court Southern District of New York)
The S.E.C. Explains (by Floyd Norris, New York Times)
Federal Judge Asks Why SEC Accepting Puny Penalty from Bank of America (by Noel Brinkerhoff, AllGov)
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