Fed’l Judge Balks Again, Further Delays Ruling on SEC’s $33M Pact With BofA
Posted Aug 10, 2009 5:22 PM CST
By Martha Neil
A proposed $33 million settlement by the U.S. Securities and Exchange Commission to resolve allegations that the Bank of America didn't disclose to investors that it was to pay $3 billion in executive bonuses when acquiring Merrill Lynch & Co. "might be approvable," a federal judge said at a hearing in a packed Manhattan courtroom today.
But he's going to need more information before he okays it, said U.S. District Judge Rakoff. It is the second time in a week that the judge has refused to okay the proposed settlement, and this time he has asked for further filings later this month and says he won't make a final decision until September, according to Bloomberg and the the Am Law Litigation Daily.
The filings are to focus on the BofA's proxy and disclosure materials in the deal last fall to acquire the investment bank in January.
While the $33 million amount probably would be appropriate, according to what Rakoff said today, if it is, essentially, a nuisance settlement by the BofA to conclude the litigation with the SEC, it is only "a tiny, tiny fraction" of the value of the bonuses paid out by it and Merrill Lynch in 2008, the judge notes.
If the disclosure materials were misleading, Rakoff suggested, the then-chief executive officers of both banks should be held accountable, reports the New York Times.
ABAJournal.com: "Judge Asks Whether Taxpayers Would Fund $33M BofA Settlement with SEC"