The $150 million settlement proposed by Bank of America in their case with the Securities and Exchange Commission was approved by a Federal Judge Monday morning. The pay out was the consequence of the financial institution’s lack of disclosure on matters related to the acquisition of Merrill Lynch. The ruling closed a case that has long been a bone of contention between BofA and the SEC, who felt the move publicly marginalized their authority. US District Judge Jed Rakoff agreed with the SEC, finding the ruling to be inadequate compensation for BofA’s actions. Still Rakoff accepted it on the basis that those responsible would be paying alongside investors that had little or nothing to do with the decision.
His approval puts an end to the trial in the coming week that would have sought to prove the bank misled its shareholders regarding pre-approved bonus payments for Merrill Lynch in the acquisition of the company.
The approval means that the SEC will no longer have to go to trial next week to prove the allegation that BofA misled shareholders about bonus payments that had been approved for Merrill Lynch. While the agreement frees the bank from further scrutiny, the key executives believed to be responsible for the lack of disclosure will be expected in court once again for civil charged of fraud. Ken Lewis, former chief executive and Joe Price, the bank’s former CFO have been accused of laboring to cover Merill Lynch losses from shareholders by the office of NY attorney-general, Andrew Cuomo.
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