BANK OF AMERICA (BoA) agreed to pay a $33m (£19.49m) fine yesterday, to settle charges that it made misleading statements to its shareholders over bonuses at Merrill Lynch.
US watchdog the Securities and Exchange Commission (SEC), filed civil fraud charges against BoA over allegations that the bank failed to tell its investors that Merrill paid out $5.8bn in bonuses just before it was taken over by the banking conglomerate at the start of the year.
Merrill was in such a perilous financial state when it was taken over that BoA was forced to accept $138bn of additional government loans and guarantees.
The SEC said BoA had neither admitted nor denied the allegations, despite agreeing to pay the fine. It added that its investigation was continuing.
Announcement of the fine overshadowed the hiring of Sallie Krawcheck – the most senior woman on Wall Street – to BoA’s global wealth management division. She previously held a similar position at Citigroup.
Financial incentives paid out at banks became a hot potato last year when New York attorney general Andrew Cuomo launched an investigation amidst a public outcry.
Last week it emerged that $33bn was paid in bonuses at nine US banks, including those which resorted to taxpayer’s money to help them survive.