Monday, August 10, 2009

Rakoff Wants More Information on SEC-BofA Settlement

Southern District of New York Judge Jed S. Rakoff took strong exception Monday to a proposed settlement in which the Bank of America would pay a $33 million fine for not disclosing that Merrill Lynch was authorized to pay more than $5 billion in discretionary bonuses before the two entities merged in 2008.

According to, Rakoff told the parties that he had "serious misgivings" about a settlement that "lacked in transparency." The judge repeatedly expressed concern that money the Bank of America received from the government through TARP was used, "as a practical matter," to pay the bonuses and noted that the proposed $33 million fine was "a tiny, tiny fraction" of the billions of dollars the two banks paid out in bonuses in 2008. More>>>

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