Judge ‘Reluctantly’ OKs $150M SEC Pact with BofA
Posted Feb 22, 2010 1:16 PM CDT
By Sarah Mui
A federal judge approved a $150 settlement between the Securities and Exchange Commission over disclosure issues related to Bank of America's Merrill Lynch takeover.
This means that the SEC will not have to go to trial next week over its assertion that Bank of America both misled shareholders about losses Merrill Lynch sustained in the two months before the merger and failed to tell shareholders that it had authorized Merrill to pay up to $5.8 billion in bonuses in 2008, the Financial Times reports.
"After full consideration, the court reluctantly grants the motion," U.S. District Judge Jed Rakoff wrote in his decision (PDF provided by Financial Times) before specifying the terms.
"We're very pleased that the settlement has been approved," Bank of America spokesman Robert Stickler told the Wall Street Journal (sub. req.).
Rakoff asked the parties to submit a revised settlement by Thursday that includes a provision that the $150 million be distributed to legacy Bank of America shareholders, the Wall Street Journal reported.
The Journal also reports that Rakoff asked to review depositions taken by New York Attorney General Andrew Cuomo in his own probe of the bank. Earlier this month, Cuomo filed a civil fraud suit against Bank of America and and two former executives over essentially the same set of facts.
Rakoff had rejected a $33 million settlement—what he refers to in today's opinion as a "vacuous proposal"—in September.