"Bank of American and Merrill Lynch ... 'effectively lied to their shareholders.'... The $3.6 billion in bonuses paid by Merrill as the ailing brokerage giant was taken over by the bank was effectively 'from Uncle Sam.'" United States District Judge Jed Rakoff refusing to approve the current Securities and Exchange Commission's settlement with Bank of America, quoted by Louise Story in "Judge Attacks Merrill Pre-Merger Bonuses" p. B1, col. 1 (New York Times Nat'l ed., "Business Day" Section, Tuesday, August 11, 2009).
Allegations of lying will not be proven. It is not even clear that the S.E.C. actually made allegations of lying. Approval of the S.E.C. settlement with Bank of America is a foregone conclusion. It is almost certain to be approved in some form, eventually. What happened at a Hearing on the proposed settlement terms yesterday is that a United States District Judge expressed reservations and objections based upon the lingering shadow of Fiduciary Duties and the lingering question of whether they were met or breached.
Merrill Lynch lost $27,000,000,000.00 or $27 Billion last year. Id.
Merrill Lynch rushed to pay $3,600,000,000.00 or $3.6 Billion in bonuses for last year. Id.
The settlement submitted for approval -- and rejected -- at Hearing yesterday called for BOA to pay $33,000,000.00 or $33 Million. Id.
More to come, no doubt.
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