Friday, July 3, 2015

BofA to pay $150M for hiding $billions in Merrill loss, bonuses

"Very modest, punitive, compensatory and remedial measures that are (not) directed at the specific individuals responsible"

BofA to pay $150M for hiding $billions in Merrill loss, bonuses

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"Bank of America Corp on Monday won approval of a $150 million settlement with the U.S. Securities and Exchange Commission over the Merrill Lynch & Co merger, ending an embarrassing public battle between the largest U.S. bank and the nation's top securities regulator," Washington Post reports here. (Case is Southern District NY, 1:09-vc-06829. Read the settlement here.)

"U.S. District Judge Jed Rakoff (a Central High School of Phila grad) on Monday approved the settlement but also lamented its deficiencies, calling it 'half-baked justice at best.'

"The settlement ends two lawsuits by the SEC against Bank of America.
"One alleged that the bank misled shareholders about $3.6 billion of bonuses that Merrill paid out.
"The other alleged that the bank misled shareholders about Merrill losses, which reached $15.8 billion in the fourth quarter of 2008.

"'Its greatest defect is that it advocates very modest punitive, compensatory and remedial measures that are neither directed at the specific individuals responsible for the nondisclosures nor appear likely to have more than a very modest impact on corporate practices or victim compensation,'" Rakoff wrote.

Had Rakoff rejected the settlement, a trial over the bonuses would have begun on March 1. The judge rejected a $33 million accord five months ago.


 

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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