Bank of America failed to disclose “extraordinary financial losses’’ at Merrill Lynch before a takeover, the SEC says.
(Daniel Acker/Bloomberg News/File 2009)
SEC expanding case against bank
Bank of America failed to disclose “extraordinary financial losses’’ at Merrill Lynch before a takeover, the SEC says.
(Daniel Acker/Bloomberg News/File 2009)
WASHINGTON - Federal regulators aim to expand their charges against Bank of America Corp. over billions in bonuses paid at Merrill Lynch, accusing the bank of failing to disclose mounting losses at Merrill before shareholders voted to approve combining the two firms.
The Securities and Exchange Commission said it had asked a federal judge to allow it to file new charges against the biggest US bank.
The SEC and Bank of America go to trial March 1. The SEC previously accused the bank of failing to disclose the bonuses when Merrill was acquired a year ago. Last fall, the judge threw out a proposed $33 million settlement and rebuked the SEC for not pursuing charges against individual executives.
Yesterday, the SEC said it was seeking to charge the bank with negligently failing to disclose “extraordinary financial losses’’ at Merrill in the two months preceding the shareholders’ Dec. 5, 2008, vote.
Bank of America did not immediately comment.
The $20 billion takeover deal was forged in the depths of the financial crisis, on the same September weekend that Lehman Brothers collapsed. It was first questioned after Bank of America disclosed that Merrill would post 2008 losses of $27.6 billion - far more than expected. Bank of America, which had already received $25 billion in US bailout aid, then asked for and received an additional $20 billion.
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