NEW YORK — A federal judge Monday rejected a $33 million settlement between the Securities and Exchange Commission and Bank of America, saying the SEC’s accusations of inadequate disclosure by the bank over bonuses paid at Merrill Lynch must now go to trial.
Separately, New York Attorney General Andrew Cuomo’s office is preparing to file charges within the next couple of weeks against several high-ranking executives at Bank of America, claiming they failed to disclose details about the bank’s acquisition of Merrill Lynch, according to a person familiar with the investigation.
The ruling in the SEC case comes one month after the agency and Bank of America thought they had put a thorny issue behind them, and it leaves the SEC with the task of mounting a case against the bank over one of the most sensitive issues of the financial crisis — executive pay on Wall Street.
The SEC announced last month it had settled its civil charges against Bank of America, which agreed to buy the New York investment bank last year, without the bank admitting or denying guilt in the case. Bank of America has said it didn’t violate disclosure rules. U.S. District Judge Jed Rakoff held up his approval of the settlement, however, and ordered the SEC last month to explain why it didn’t pursue charges against specific executives at Bank of America over the accusations. The Associated Press
