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Monday, September 14, 2009

Report: BofA Execs to Face Civil Charges

by Calculated Risk on 9/14/2009 03:35:00 PM

From CNBC: BofA Execs to Face Charges from NY's Cuomo: Source

Attorney General Andrew Cuomo's office is likely to file civil charges against the executives over their role in failing to alert shareholders to mounting losses as well as accelerated bonus payments at Merrill ...
Earlie today, from Bloomberg: Bank of America Settlement With SEC Over Merrill Bonuses Rejected by Judge
Bank of America Corp.’s $33 million settlement with the U.S. Securities and Exchange Commission over Merrill Lynch & Co. bonuses was rejected by a judge, who said the deal appeared to be a “contrivance” and ordered the case to trial on Feb. 1.
...
“The SEC gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger,” [U.S. District Judge Jed Rakoff] wrote. “The bank’s management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense not only of the shareholders, but also of the truth.”
...
“The parties’ submissions, when carefully read, leave the distinct impression that the proposed consent judgment was a contrivance designed to provide the SEC with the fa├žade of enforcement and the management of the bank with a quick resolution of an embarrassing inquiry.”
Ouch. Bad day for BofA - but note that the NY charges will be civil, not criminal.