Bank of America asks judge to OK $33 million fine
BOA, asking a judge to let it settle a regulator’s claims it misled speculators while purchasing Merrill Lynch, on Mon. claimed a $33 million fine is satisfactory as it would had “powerful defenses” at trial. Though the SEC Commission faults the bank’s disclosures, it was “widely understood” that Merrill planned to pay billions of greenbacks to workers at the end of 2008, BofA related in a short to US District Judge Jed Rakoff. BofA claimed it is agreeing to settle to avoid a regulatory dispute, but did not identify any executive concerned in purported misconduct.
Judge Rakoff declined to sign off on the deal earlier in the month, demanding additional info to guarantee the penalty is acceptable. The settlement would resolve claims that BofA failed to tell speculators it had agreed to let Merrill pay $5.8 bill in worker bonuses and motivations. “Bank of America anxious to reach a settlement with the SEC, so that BOA wouldn’t face the pointless distraction of a lengthy dispute with one of its principal regulators,” the Charlotte-based company announced.
The SEC dispute arose “at a point when the fiscal industry continues to face troublesome challenges springing from doubtful and turbulent market conditions. A Nov 2008 joint stand in statement for the purchase said that Merrill had made an agreement not to pay year-end performance bonuses or other inducement pay to operatives before the deal’s closing without BofA’s consent, the SEC wrote in an August three court action. Unknown to stockholders, such a schedule was ready permitting up to $5.8 bill in payments, the SEC declared.
Merrill later distributed $3.6 bill, even as its yearly loss dilated to a record $27.6 bln. The contract lacks “transparency,” Rakoff related at an August 10 hearing. He told BofA and the SEC to submit further filings by Mon., and asserted he will not be able to approve a settlement before Sept. Merrill disclosed plans to pay billions of dollars of bonuses in regulatory filings and on an Oct 16 conference chat following its 3rd quarter takings report, BofA wrote in the transient. Merrill paid bonuses last year to about forty thousand workers, excluding its top 5 middle management, who did not get any awards.
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