The Securities and Exchange Commission said Monday it will go to trial against Bank of America over bonuses at Merrill Lynch. It may wind up bringing charges against bank executives or board members.
Last week the federal judge issued a stinging rejection of a $33 million settlement of the case, more or less accusing both the SEC and Bank of America cooperating to avoid producing information that might be embarrassing to the bank and the government.
He rejected the settlement, in part, on the grounds that it was to be fully paid by the bank and not any individuals, which would amount to shareholders paying a fine in a case about shareholders being cheated of required disclosure at the time of the merger.
The SEC now says it will “vigorously pursue” its case against Bank of America. If the SEC brings charges against individuals, we may learn far more about the circumstances of the merger than we have so far as individuals have far more incentive to cooperate to reduce charges than corporations.The case could prove embarrassing to Bank of America executives and former Merrill executives..
Last night’s announcement means that the SEC isn’t going to try to renegotiate the accord with Bank of America.
For those of you keeping score at home, Bank of America still faces an investigation by New York Attorney General Andrew Cuomo (over bonuses and losses at Merrill), an inquiry from Congress (over the role the government played during the merger) and a lawsuit by former Merrill executive Bob McCann (who wants to run the UBS brokerage and says he left the firm for good reason and is no longer bound by his noncompete).