Wednesday, August 26, 2009

USDJ Rakoff Rejects SEC-BofA Settlement.

Judge Rakoff wants the explanation behind why a Bank of America proxy statement last November misled investors about bonuses for employees at Merrill Lynch, which was about to be acquired by the bank. On Tuesday, he stated another desire: to get the SEC to better explain why had agreed to a settlement without pressing the bank’s executives harder. The judge is also questioning how anyone can judge the merit of a reliance on the advice of counsel defense, when the defendant has not waived the attorney-client privilege.

This is obviously a tough decision for the SEC, and is starting to suggest an apparent willingness on the part of the Commission to let a big player off the hook for serious violations with the payment of a significant sum of money. As we have said in the past, if this wasn't Bank of America, and instead was a small or regional firm, not only would the SEC be looking to put them out of business, prosecutors would be filing criminal charges. More>>>

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