It’s a No-Go for BofA Settlement with SEC

U.S. District Judge Jed Rakoff rejected a settlement between the Securities and Exchange Commission (SEC) and Bank of America (BofA) over bonuses paid by Merrill Lynch, the Associated Press reported.

Rakoff said the parties should be prepared for a possible trial beginning no later than February 1.

After twice sending BofA and the SEC back to come up with information, Rakoff is still not content with the proposed settlement (see “Judge Still Not Satisfied with BofA, SEC Settlement”). He wrote in an opinion today that the $33-million settlement was a “trivial penalty for a false statement that materially infected a multi-billion-dollar merger,” according to the AP.

BofA is under scrutiny for $3.6 billion in bonuses paid to Merrill executives before the bank’s acquisition of Merrill Lynch. Last month the bank agreed to pay $33 million to settle SEC charges that said BofA misled investors by authorizing the bonus payments (see “SEC Charges BofA $33M for Violations Related to Merrill Deal”).

The bank also faces a deadline today to provide more details about the bonuses to New York Attorney General Andrew Cuomo (see “BofA Fires Back at Cuomo”).