Tuesday, April 14, 2009
After Andy Cuomo broke the ice
The SEC is now investigating whether Bank of America broke any laws with the Merrill bonuses.
The Securities and Exchange Commission is reviewing whether Bank of America broke the law by not telling shareholders about Merrill Lynch’s plan to pay out $3.6bn in bonuses before they voted for a government-backed merger of the two banks.Under the Bushoviks, an SEC investigation was often used to remove the case from the hands of competent investigators and cover up the problem. We can only hope that Summers and Geithner haven't convinced Obama to do the same.
Merrill paid the bonuses in December, days before it was acquired by BofA and a month before bonuses were normally dispensed.
BofA has said it was not required to tell its shareholders about the bonuses.
But Mary Schapiro, chairman of the SEC, wrote in a letter to a Democratic congressman that the regulator was “carefully reviewing the Bank of America disclosure” and had not yet expressed a view on whether the bonus plan should have been revealed.
Federal securities law prohibits institutions from “omitting material facts” in connection to the purchase or sale of securities.
The incident has stirred controversy because Merrill was racking up record losses of $27.5bn for the year when it paid the bonuses, and Ken Lewis, BofA chief executive, eventually asked for $20bn in taxpayers’ money to complete the takeover.
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