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Judge rules against BoA & SEC deal

A US federal judge yesterday rejected a $33m (&pound;19.9m) settlement reached by the Securities and Exchange Commission (SEC) and Bank of America (BoA) over accusations that the bank misled shareholders over millions of dollars of bonuses. <br /><br />In the third rejection of the deal by American courts, USDistrict Judge Jed Rakoff said the agreement could not &ldquo;remotely be called fair&rdquo; and ordered the SECand BoA to prepare for trial by 1 February. <br /><br />The judge added he had a &ldquo;distinct impression&rdquo; that the settlement was &ldquo;a contrivance designed to provide the SEC with the facade of enforcement and the management of BoA with a quick resolution of an embarrassing inquiry -- all at the expense of the sole alleged victims, the shareholders&rdquo;. <br /><br />The settlement was meant to resolve SEC charges that BoA misled shareholders about having authorised the bonuses by not mentioning them in statements relating to the merger.<br /><br />Rakoff&rsquo;s decision came as BoA and its chief executive Kenneth Lewis faced a deadline last night from New York Attorney General Andrew Cuomo to provide more details about the bank&rsquo;s purchase of Merrill.<br /><br />BoA agreed to buy Merrill after less than 48 hours of talks on the same weekend that Lehman was collapsing last September. BoA has received $45bn of federal bailout money, including $20bn to help absorb Merrill.<br />