BofA agrees to $33M SEC fine over Merrill bonuses

BofA agrees to $33M SEC fine over Merrill bonuses

Bank of America pays $33 million SEC penalty for misleading investors about Merrill bonuses
By Christopher S. Rugaber, AP Economics Writer
On Monday August 3, 2009, 9:27 pm EDT
finance.yahoo.com

WASHINGTON (AP) -- Bank of America Corp. has agreed to pay a $33 million penalty to settle government charges that it misled investors about Merrill Lynch's plans to pay bonuses to its executives, regulators said Monday.

In seeking approval to buy Merrill, Bank of America told investors that Merrill would not pay year-end bonuses without Bank of America's consent. But the Securities and Exchange Commission said Bank of America had authorized New York-based Merrill to pay up to $5.8 billion in bonuses.

(visit the link for the full news article)



[edit on 4-8-2009 by azureskys]

Talk about getting a bargin.
What a farce this is!
A measly 33 Million dollar fine, for allowing 5.8 Billion dollars in bonuses to be payed out to failing Merrill Lynch excutives after lying to investors, saying (in wtiting), Merrill would Not pay discretionary bonuses or other compensation.
This is not even a spanking. It is only a slap on the hand.
Why such a small amount for such a huge theft.

Who gets that 33mil. anyway??
I'll bet its not the investors who got ripped off !


finance.yahoo.com
(visit the link for the full news article)

Here Is the SEC Statement on BofA’s Settlement of the Merrill Bonus Case

blogs.wsj.com...


By Stephen Grocer
The saga of the bonuses Merrill Lynch paid to its employees in December, it seems, has come to a conclusion–at least where the SEC is concerned.

The regulator filed and simultaneously settled civil fraud charges against BofA over the bank’s alleged failure to disclose to investors that it agreed to pay $5 billion in bonuses at the time of its takeover of Merrill Lynch. The SEC said the Charlotte, N.C., bank agreed to pay $33 million to settle the suit, which was filed in federal court in Manhattan.

Below is SEC’s news release announcing the charges and the settlement:

* * *
FOR IMMEDIATE RELEASE

SEC CHARGES BANK OF AMERICA FOR FAILING TO DISCLOSE MERRILL LYNCH BONUS PAYMENTS

Washington, D.C., Aug. 3, 2009 – The Securities and Exchange Commission today charged Bank of America Corporation for misleading investors about billions of dollars in bonuses that were being paid to Merrill Lynch & Co. executives at the time of its acquisition of the firm. Bank of America agreed to settle the SEC’s charges and pay a penalty of $33 million.

The SEC alleges that in proxy materials soliciting the votes of shareholders on the proposed acquisition of Merrill, Bank of America stated that Merrill had agreed that it would not pay year-end performance bonuses or other discretionary compensation to its executives prior to the closing of the merger without Bank of America’s consent. In fact, Bank of America had already contractually authorized Merrill to pay up to $5.8 billion in discretionary bonuses to Merrill executives for 2008. According to the SEC’s complaint, the disclosures in the proxy statement were rendered materially false and misleading by the existence of the prior undisclosed agreement allowing Merrill to pay billions of dollars in bonuses for 2008.

“Companies must give shareholders all material information about corporate transactions they are asked to approve,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Failing to disclose that a struggling company will pay out billions of dollars in performance bonuses obviously violates that duty and warrants the significant financial penalty imposed by today’s settlement.”

David Rosenfeld, Associate Director of the SEC’s New York Regional Office, said, “As Merrill was on the brink of bankruptcy and posting record losses, Bank of America agreed to allow Merrill to pay its executives billions of dollars in bonuses. Shareholders were not told about this agreement at the time they voted on the merger.”

The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Bank of America represented in the merger agreement that Merrill had agreed not to pay any bonuses to its executives before the merger closed, except as set forth in a schedule. Unbeknownst to shareholders, the schedule was already in place weeks before the proxy statement was filed with the SEC and disseminated to shareholders. Under the schedule, Bank of America had agreed that Merrill could pay up to $5.8 billion, or nearly 12 percent of the $50 billion merger consideration, in discretionary bonuses to its executives. The merger agreement was included as an appendix and summarized in the joint proxy statement that was distributed to all 283,000 shareholders of both companies. But Bank of America’s agreement to allow Merrill to pay these discretionary bonuses was in a separate document that was omitted from the proxy statement and whose contents were never disclosed before the shareholders’ vote on the merger.

In settling the SEC’s charges without admitting or denying the allegations, Bank of America consented to the entry of a judgment that permanently enjoins Bank of America from violating the proxy solicitation rules – Section 14(a) of the Exchange Act of 1934 and Rule 14a-9 – and orders Bank of America to pay the financial penalty. The settlement is subject to court approval.

The SEC acknowledges the assistance of the U.S. Attorney’s Offices for the Southern District of New York and the Western District of North Carolina, the Federal Bureau of Investigations, and the Office of the Special Inspector General for the Troubled Asset Relief Program.

The SEC’s investigation is ongoing.




And another blog I found well written:
blogs.wsj.com...

Well it's just as I suspected.
Most Lemmingoids are much more concerned with what happening on other planets, ufos, crop circles and the weird news instead of what is really affecting each of us at at this very second.

Actively and systematically being fleeced is so common place.
What's a little more pilfering of our earnings ?