Compliance August 26, 2009

Judge Still Not Satisfied with BofA, SEC Settlement

U.S. District Judge Jed Rakoff refused to sign off on Bank of America’s $33-million settlement with the Securities and Exchange Commission (SEC) over disclosures of bonuses paid to Merrill Lynch executives.

Reported by

On Monday, both sides filed legal briefs defending the proposed settlement (“BofA, SEC Defend Proposed Settlement”). However, U.S. District Judge Jed Rakoff said he wants a better explanation from both parties by September 9, according to news reports.

More specifically, Rakoff said in an order today that he wants to know why BofA settled its case if it still believes its disclosure was appropriate, Bloomberg reported. He also asked whether the lawyers behind the false proxy statement should be held responsible.

Furthermore, Rakoff wants to know why the SEC accepted the bank’s claim that executives who issued a misleading statement relied on lawyer’s advice. He also wants to know why the agency didn’t press the bank to waive attorney-client privilege to keep communications with counsel confidential, according to the news report.

The case is Securities and Exchange Commission v. Bank of America Corp., 09-cv-6829, U.S. District Court, Southern District of New York. 



The Markets August 26, 2009

Annuity Sales Climb in Second Quarter

The combined net assets of U.S. variable annuities rose more than 11% in the second quarter, according to the Insured Retirement Institute (IRI).

Reported by

The increase marks the highest quarter-to-quarter boost in at least the past 17 quarters, the IRI said. Variable annuities assets now total more than $1.19 trillion. Variable annuity sales for the second quarter were $31.8 billion, up from $30.4 billion in the previous quarter.

Most of those sales occurred through retirement plans. There were $23.4 billion in qualified sales and $8 billion in non-qualified in the second quarter, according to the data.

“As the economy begins to show signs of stability, consumers continue to be thoughtful about their investments as they come back to the market,” said Cathy Weatherford, president and CEO of IRI. “The growth in the annuity industry underscores this emerging trend, demonstrating the security and peace of mind insured retirement strategies provide to consumers.”

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