According to CBS:
The New York Attorney General's office is preparing charges against several high-ranking Bank of America executives over the bank's alleged failure to disclose details about its acquisition of Merrill Lynch, according to a person familiar with the investigation.
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, said the person, who requested anonymity because no charges have been filed yet.
These would be securities fraud charges.
Earlier a judge ruled against BoA, rejecting a $33 million dollar settlement with the SEC. Recall the bonuses paid out to Merrill Lynch executives was $3.6 billion. The company then lost $28 billion in 2008. Hmmm, rescued from failure after running a company into the ground to the tune of $28 billion in a year....and receiving billions in bonuses for doing so!
Obviously, to settle for $33 million is simply a slap on the wrist (with an apology for causing a sting!), which doesn't do anything for the losses incurred by the BoA shareholders.
Even worse, that fee would be paid by the shareholders, adding insult to injury.
Even better the judge ordered the SEC to explain why they didn't further investigate misleading BoA shareholders on the Merrill bonuses.
The judge is on a roll (good for you!) and ripped the S.E.C. a new one, quoting Oscar Wilde no less:
The judge also criticized the S.E.C., which has been trying to step up the effectiveness of its investigations unit. The judge quoted Oscar Wilde’s “Lady Windermere’s Fan” in the end of his ruling to say that a cynic is someone “who knows the price of everything and the value of nothing.”
The proposed settlement, the judge continued, “suggests a rather cynical relationship between the parties: the S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger; 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.”
(h/t Calculated Risk)