SEC broadens charges on Bank of America
Author: guccishoes
Federal regulators on Monday moved to expand charges against Bank of America for allegedly lying to investors during the 2008 fall financial crisis, but once again decided against charging the executives or lawyers who signed off on the company's actions.
cheap gucci shoes The Securities and Exchange Commission initially accused the bank of concealing from investors plans to pay billions of dollars in bonuses to employees at Merrill Lynch before shareholders were asked to approve a merger of the two firms. Now, the SEC is claiming that Bank of America also withheld information about mounting losses at Merrill. The latest accusations come after a federal judge rejected a $33 million settlement between the SEC and the bank last fall because it failed to hold accountable any of the executives or lawyers who were responsible for key omissions in documents submitted to shareholders ahead of a vote that ultimately approved the acquisition.
gucci shoes In declining to charge individuals, the SEC said investigators found no evidence that bank executives and lawyers intended to mislead the public. Although U.S. District Judge Jed S. Rakoff of the Southern District of New York did not approve the SEC's request to add new charges to its earlier complaint, the SEC plans to file a separate complaint against Bank of America with the new claims. Last year, Rakoff ordered the case to trial after rejecting the settlement. At the time, he ridiculed the SEC's argument -- essentially repeated in Monday's filing -- that Bank of America simply acted carelessly in omitting important information from the proxy statement with the terms of the deal, but that executives and lawyers did not mean to do wrong.
discount gucci shoes "If the SEC is right in this assertion," the judge wrote in an August order, "it would seem that all a corporate officer who has produced a false proxy statement need offer by way of defense is that he or she relied on counsel." Bank of America said in a statement that it felt vindicated since no executives or lawyers face charges, and it said the SEC's new claims were meritless. "Bank of America's position continues to be that the company and its officers provided sufficient and appropriate disclosure prior to the shareholder vote in December 2008," the statement read. "Prior to the vote, Merrill Lynch had five straight quarters of multi-billion dollar losses." According to the SEC's new claims, Bank of America knew by the time of the shareholder vote that Merrill Lynch had lost $4.5 billion in October 2008 and that the company's finances were deteriorating. The proposed new complaint would allege that the bank "erroneously and negligently concluded that no disclosure concerning these extraordinary losses was required as shareholders were called upon to vote on the proposed merger with Merrill Lynch," the agency said in a statement. The SEC added, "The lack of any disclosure about the losses deprived shareholders of up-to-date information that was essential to their ability to fairly evaluate whether to approve the merger." About the Author:
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