SEC Plans Deeper Probe of BofA-Merrill Merger

<p>Federal securities regulators said they will take the opportunity of pre-trial fact-finding in their existing case against the Bank of America (BofA) to see if any additional charges need to be filed.</p>
Reported by Fred Schneyer

The Securities and Exchange Commission (SEC) has been investigating BofA over its acquisition of Merrill Lynch last year. The Washington Post reported the SEC vowed to pursue a wider probe against BofA as the agency began preparations for trial in its existing case involving BofA.

In August, the SEC accused BofA of concealing from investors the plans to pay billions of dollars in bonuses to Merrill employees. The SEC and BofA reached a $33 million out-of-court settlement, which was later rejected by U.S. District Judge Jed Rakoff (see “It’s a No-Go for BofA Settlement with SEC”). 

“[W]e will vigorously pursue our charges against Bank of America and take steps to prove our case in court,” the SEC said in a statement, according to the news report. “We will use the additional discovery available in the litigation to further pursue the facts and determine whether to seek the court’s permission to bring additional charges in this case.”

As required, the SEC and BofA filed a plan to try the case with the judge.

New York Attorney General Andrew M. Cuomo and congressional investigators also are probing the BofA-Merrill Lynch deal (see “BofA Fires Back at Cuomo”). Sources familiar with Cuomo’s investigation have said he is drawing up charges against top BofA executives.

As a result, the upcoming trial may require BofA to disclose what was said between lawyers and executives in the course of preparing for the Merrill Lynch acquisition, the news report said.

Tags
Broker/Dealer, Broker/Dealers, M and A, SEC,
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