At yesterday’s hearing over the SEC’s case against Bank of America, judge Jed Rakoff hammered away with persistent questions about who knew what and when they knew it. The judge was focused on the question of the enormous bonus payments that were made to Merrill employees just before the merger was completed.
The SEC hadn’t offered up any names in its complaint against Bank of America, saying it wasn’t targeting individuals. But as Rakoff kept pointing out, instituions don’t make decisions about bonsues. People inside of institutions do.
Under persistent questions from the judge the SEC offered two names, Reuter’s Rolfe Winkler reports. The bonus discussions, according to the SEC, were handled by Greg Curl of Bank of America and Greg Fleming of Merrill. Fleming was reportedly the person who originally brokered the deal with Bank of America. As sole president at Merrill at the time, he would likely have been well placed to know of the losses mounting on Merrill’s balance sheet.
Interestingly, Bank of America’s lawyer says that Merill CEO John Thain and BofA CEO Ken Lewis weren’t aware of the of details of the bonuses because those were contained in a “disclosure schedule” that was supposed to be attached to the SEC filing detailing the merger. The disclosure schedule was never atttached, and the lawyer says that Thain and Lewis didn’t even see it.
Which is mightily convenient for those at the top seeking to avoid taking responsibility for the decisions.
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