Bank of America defends $33M settlement of Merrill claim
Bank of America Corp. officials are arguing that a $33 million settlement it reached with the SEC over claims it misled investors while it was buying Merrill Lynch & Co. Inc. is more than adequate, according a report from Bloomberg.
Bank of America Corp. officials are arguing that a $33 million settlement it reached with the SEC over claims it misled investors while it was buying Merrill Lynch & Co. Inc. is more than adequate, according a report from Bloomberg.
The fine is sufficient because it would have had “powerful defenses” at trial, BofA said in a brief filed in federal court in Manhattan today with U.S. District Judge Jed Rakoff, according to Bloomberg.
Earlier this month, the judge declined to agree to the settlement pending additional information ensuring the penalty is suitable.
“I am concerned that we have not yet ferreted out all that the court needs to know,” U.S. District Judge Jed Rakoff said at a hearing in New York Aug. 10.
Adding that he is looking for “the truth, not the spin,” Mr. Rakoff ordered both sides to provide additional details to the court within the next two weeks.
Bank of America, without admitting or denying the allegations, agreed early in August to pay the fine to settle charges that it misled investors about Merrill Lynch’s plans to pay bonuses to executives even as it prepared to report billions in losses.
Those losses affected Bank of America’s bottom line after its takeover of the troubled investment bank was completed.
The SEC alleges that Bank of America promised its shareholders that Merrill would not pay year-end bonuses without getting the Charlotte, N.C-based bank’s prior consent, but in fact had already given Merrill authorization to pay up to $5.8 billion in extra compensation.
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