From corporation-watch at countercorp.org  Mon Aug  3 14:55:01 2009
From: corporation-watch at countercorp.org (Corporation Watch)
Date: Mon, 3 Aug 2009 11:55:01 -0700
Subject: [Corp. Watch] All corporations - like all governments - lie
Message-ID: <9B3007BB-787E-47F9-B184-03FB71AE45FE@countercorp.org>


BofA to Pay $33 Million Fine Over Merrill Bonuses

  SEC charged Bank of America with failing to alert shareholders
  about bonus payments to Merrill Lynch executives after merger

By David Ellis

(CNN, Aug. 3) -- The Securities and Exchange Commission (SEC) filed  
charges Monday against Bank of America (BofA) for misleading investors  
about billions of dollars in bonuses paid to top executives at Merrill  
Lynch following its purchase of the brokerage giant.
	Bank of America agreed to settle, without admitting to the charges.  
The Charlotte, N.C.-based lender will pay a penalty of $33 million,  
which will be subject to court approval. The company was not  
immediately available for comment.

	Regulators alleged that Bank of America failed to disclose plans to  
give out $5.8 billion in bonuses for fiscal year 2008 in its proxy  
statement. Instead, Bank of America told shareholders that Merrill had  
agreed not to pay year-end performance bonuses, according to the SEC.

	"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," Robert Khuzami, director of the SEC's division of  
enforcement, said in a statement.

	Merrill's decision to pay big bonuses first came to light in  
February, after New York State Attorney General Andrew Cuomo accused  
the firm of "secretly" rewarding executives before its merger with  
BofA closed.

	The subsequent investigation by state officials ultimately led to a  
string of revelations, including Merrill's decision to move up the  
date of its year-end bonus payments. BofA CEO Ken Lewis also alleged  
that federal regulators threatened to remove him and other board  
members if the bank backed out of the deal to acquire Merrill.

	Congress waded into the issue shortly thereafter, as lawmakers  
grilled Lewis, Federal Reserve Chairman Ben Bernanke, and former  
Treasury Secretary Henry Paulson on the matter.

	Rep. Darrell Issa (R-Calif.) the ranking minority member on the House  
Committee on Oversight and Government Reform, said that the SEC's  
charges against BofA offered a "validation" of the concerns of his  
fellow committee members.

	The committee has been looking into what transpired after BofA agreed  
to buy Merrill, and Issa hinted that the investigation may not be over.

	"The circumstances certainly underscore the need for us to continue  
our investigation of the Bank of America -- Merrill Lynch acquisition  
and the role officials at the Treasury and Federal Reserve had in  
pressuring the acquisition to move forward," Issa said in a statement.

	Cuomo's office also indicated Monday that Bank of America may not be  
free from further scrutiny, adding that they were continuing their  
investigation about whether Merrill's bonuses violated state  
securities laws.