BofA and SEC back to court
BANK OF AMERICA (BofA) is set to return to court in New York today to find out if its settlement with the Securities and Exchange Commission (SEC) will be approved.
It is round two for the bank, as a similar deal between the SEC and BofA was rejected six months ago by district judge Jed Rakoff.
The hearing revolves around a new settlement, in which BofA has agreed to pay $150m (£96m) to wronged investors. Both SEC actions involved statements made to investors by BofA in late 2008, before its acquisition of Merrill Lynch.
The judge’s decision is hard to predict, as the new deal still has some of the elements the judge has rejected.
He turned down the last deal, in which BofA agreed to pay $33m to settle the narrower charge of whether it had issued misleading statements regarding Merrill Lynch bonuses, because he said the SEC alleged BofA made misleading statements without identifying any individuals. But he may be appeased by the New York attorney-general Andrew Cuomo filing civil fraud charges against ex BofA chief Ken Lewis and Joe Price, then BofA’s chief financial officer, for allegedly misleading shareholders and federal regulators. Both men deny the charges.