Judge doesn't sign off on BofA, SEC settlement

Judge declines to OK BofA's $33M settlement with SEC over Merrill bonuses, sets Monday hearing

NEW YORK (AP) -- A judge has ordered a hearing on a $33 million proposed settlement between the Securities and Exchange Commission and Bank of America Corp. over executive bonuses.

Bank of America had agreed earlier this week to pay the penalty to settle government charges that it misled investors about Merrill Lynch's plans to pay bonuses to its executives.

But the settlement was subject to court approval, and Judge Jed S. Rakoff declined to grant it and set a hearing for Monday.

In a statement late Wednesday, Rakoff said the proposed settlement "would leave uncertain the truth of the very serious allegations made in the complaint."
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 in its complaint filed with the U.S. District Court for the Southern District of New York, the SEC said Bank of America had already authorized New York-based Merrill to pay up to $5.8 billion in bonuses and didn't share that information with shareholders.

That rendered a statement Bank of America mailed to 283,000 shareholders of both companies about the Merrill deal "materially false and misleading," the SEC contends. Bank of America agreed to settle the charges without admitting or denying the allegations.

The judge also said the agreement "in no way specifies the basis for the $33 million figure or whether any of this money is derived directly or indirectly" from public funds advanced to Bank of America as part of its bail out.

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