The SEC is defending itself for only asking for $33 million from Bank of America (BAC) because it did not tell investors about $3.6 billion in Merrill bonuses while acquiring the troubled financial management company.
NYT: The S.E.C. said in a federal court filing that the settlement was “fair” and “reasonable” and that it had lacked enough evidence to charge individuals at the bank with misleading shareholders about the $3.6 billion in bonuses paid to Merrill employees.
In its own legal filing, Bank of America maintained its previous stance that “there is no evidence that any individual is culpable” and said it had agreed to the settlement with the S.E.C. to avoid a protracted public court fight that could potentially damage its reputation.
In the legal filing, the SEC says the penalty amount demanded “takes full account of the seriousness of the violation and the need for deterrence, while giving due consideration to all other relevant factors.” But it says there was an “absence of proof sufficient to assert individual charges.”
The settlement is far from being paid. The federal judge for the case, Jed Rakoff, is refusing to approve it, questioning why the SEC didn’t go after top brass. And New York Attorney General Andrew Cuomo is weighing charges against BofA, recently sending a letter telling the bank’s lawyers to stop hindering the investigation. The bank has already denied the charge.