Tuesday, February 9, 2016

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


"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 interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

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

Joseph N. DiStefano
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