This is the second amended SEC complain in the ongoing rumpus over whether Bank of America adequately informed investors over the size of losses at soon-to-be-acquired Merrill Lynch, along with the fact that Merrill executives were about to trouser $5.8bn in bonuses.
You will remember, of course, that the SEC previously reached a $33m settlement with Bank of America over the matters – only to see the deal thrown out out by a US district judge, Jed Rakoff, who described it as a “contrivance designed to provide the SEC with the facade of enforcement”.
That was back in September, and Judge Rakoff specifically said at the time that he wanted the SEC to name and shame the individuals responsible.
No matter. While the SEC has expanded its charges against the institution, the regulator is still not pursuing individuals, with Monday’s statement declaring:
According to the SEC’s proposed complaint, Bank of America executives at various times discussed the firm’s disclosure obligations with internal and external counsel. These executives are not alleged to have deliberately concealed information from counsel or otherwise acted with scienter or intent to mislead. Nor is any counsel alleged to have acted with scienter or intent to mislead. For these reasons, the SEC’s proposed complaint does not seek charges against any individual officers, directors or attorneys. SEC staff has advised the Commission that, after a careful assessment of the evidence and all of the relevant circumstances, it has determined that charges against individuals for their roles in connection with proxy disclosure are not appropriate.
So, as far as the SEC is concerned, Ken Lewis et al really are off the hook. What was not clear, immediately, was whether Attorney General Andrew Cuomo still feels differently.
Judge Rakoff, meanwhile, was due to hear the SEC’s updated complaint at 5pm on Monday…
Related links:
SEC Seeks Additional Charges Against BofA – WSJ
Judge 3, SEC 0 in Bank of America/Merrill case – FT Alphaville
Judge Rakoff rocks the SEC boat – FT