Judge Rejects SEC, BOA Settlement

Judge Rejects SEC, BOA Settlement

http://www.bloomberg.com/apps/news?pid=20601103&sid=aV_seqtKav9A

The US Securities & Exchange Commission (SEC) is weighing options after a judge rejected its $33 settlement with the Bank of America. US District Judge Red Rakoff has refused to accept a settlement resolving SEC’s claims against the Bank of America that the latter deceived its shareholders about the bonuses paid to Merrill Lynch staffers. The judge said the settlement appeared to be penalizing the company shareholders for the wrongdoing committed by the executives. The aim appears to be a quick resolution of the enquiry while providing SEC with a façade of enforcement, the Judge said. Since the Bank of America neither accepted nor denied the charges, why was it ready to pay $33 million, the judge asked. There is need to name the individual executives and the lawyers involved and penalize them rather than the innocent shareholders, Rakoff said. The SEC may have to file a new lawsuit or push the case to a trial.