This Updates an Update here on August 13, 2009 to the previous post, "Bonuses Bonked, Fiduciary Concerns Stifle SEC Settlement!"
The previous UPDATE to this post concerned a Federal Judge's refusal to approve the settlement arranged by the Securities and Exchange Commission with Bank of America of an SEC proceeding. The SEC proceeding arises out of BOA failing to notify its shareholders that Merrill Lynch had already paid bonuses to its Wall Streeters. At the time, BOA reportedly had already told its shareholders that BOA would take steps if Merrill Lynch tried to award bonuses in the future. This UPDATE concerns that event also.
The Federal Judge "is the first to demand that Bank of America reveal who decided not to disclose the bonuses to shareholders before the merger with Merrill closed." Louise Story, "Plain Talk From Judge Weighing Merrill Case" p. B1, col. 6 (New York Times Nat'l ed., "Business Day" Section, Monday, August 24, 2009). It is of more than passing interest to learn that the Federal Judge began his legal career in the Securities Fraud unit in the Office of the United States Attorney for the Southern District of New York. Id.
The Federal Judge, Judge Jed Rakoff, is reportedly looking to learn who is at "fault". Id.; Louise Story, "Focus Shifts to Lawyers' Actions in Case of Merrill's Bonuses" p. B1, col. 1 (New York Times Nat'l ed., "Business Day" Section, Tuesday, August 25, 2009). Bank of America and the SEC have now responded to the Judge's question. Bank of America blamed its lawyers, and Merrill's lawyers, for making the decision to withhold (conceal?) the fact of the previously paid Merrill bonuses from Bank of America's shareholders. "But the bank did not name which of its own executives approved the lawyers' decisions, which some legal experts said could alienate Judge Rakoff." Louise Story, "Focus Shifts to Lawyers' Actions in Case of Merrill's Bonuses" p. B1, col. 1 (New York Times Nat'l ed., "Business Day" Section, Tuesday, August 25, 2009). For its part, the SEC also blamed BOA's lawyers and refused to identify which of the bank's own executives approved the lawyers' decisions. See id.
It is impossible for any adult to believe that lawyers made the decision for these people at Bank of America and Merrill Lynch and on Wall Street. Any decision.
Lawyers give people advice and recommendations, especially to people like these, but lawyers do not make decisions like these.
The ones who did remain anonymous at this time.
The search for fault is also at the center of allegations of breached Fiduciary Duties and Bad Faith Claims against both Third-Party Insurance Companies and First-Party Insurance Companies. Dennis J. Wall, "Litigation and Prevention of Insurer Bad Faith" ยงยง 3:28-3:30, 9:05 (Second Edition Shepard's/McGraw-Hill; 2009 Supplement in process West Publishing Company).
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