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We have another fly in the ointment. Judge Jed Ratkoff of federal district court refused to approve a $33 million settlement in the SEC vs. Bank of America Corp case.
In the complaint, the SEC had alleged that Bank of America Corp (NYSE: BAC) told investors in the proxy documents for the Merrill Lynch merger that Merrill agreed NOT to award year-end performance bonuses before the merger closed.
Here's the rub. The SEC charges that Bank of America had already authorized Merrill to pay $5.8 billion in bonuses. Merrill ultimately paid $3.6 billion.
To further rub salt in the wound, two weeks after the merger was approved on January 1, 2009, Bank of America accepted $20 billion from the federal Troubled Asset Relief Program (TARP).
The judge ruled that the $33 million fine did not give any specifics and did not specify whether or not any of the TARP monies were used in the $33 million figure.
Without being directly involved in this matter, it seems on the surface that $33 million is just a slap on the wrist for the gross violation of public trust by Bank of America. Actually, the fine should be in the neighborhood of $3.6 billion (the amount of the the bonuses) plus legal fees.
Why the SEC agreed to such a trickle of a fine is beyond comprehension. The American people want justice in these cases, not a whitewash. The SEC must take off the gloves and put up a real fight against all of the injustices and wild speculation that led to the collapse of our financial system.
Do you believe that the settlement is a fair one?
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Reader Comments (Page 1 of 1)
8-06-2009 @ 2:31PM
Raymond R. Murray said...
Yes, it definitely is a white wash and will most likely lead to furthur injustices in the furture by the same companies and corporations that did it the first time.