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Administration December 1, 2010
Report Says SEC Suit against BofA Omitted Significant Violations
December 1, 2010 (PLANSPONSOR.com) - A report by the office of Securities and Exchange Commission (SEC) Inspector General David Kotz concludes that in its hurry to bring suit against Bank of America over its Merrill Lynch acquisition, the agency omitted significant violations from its initial charges.
Reported by Rebecca Moore
ABC News reports that the IG’s investigation found SEC enforcement attorneys felt pressure to bring the
case quickly because it was a high-profile issue. It also found that the agency sought a relatively small penalty against Bank of America, $33 million, after investigators initially “relied substantially on case precedent” to arrive at the figure.
According to the news report, a federal judge threw out that settlement amount and the deal was revised early this year to include a $150 million penalty.
The report conceded, however, that the SEC staff operated “ably” under tight deadlines to investigate and bring the case against Bank of America.
The suit claimed Bank of America (BofA) Corp., certain officers, and directors concealed intended bonuses and losses at Merrill Lynch & Co after the bank agreed to acquire the investment firm (see Judge Moves Forward Shareholder Claims against Bank of America).
Among the report’s recommendations is that the SEC review the level of cooperation among law enforcement agencies on investigations and determine where it could be improved. The report said SEC attorneys expressed the view that the office of New York Attorney General Andrew Cuomo, which also conducted an investigation of Bank of America, failed to cooperate fully with the SEC and refused to share some information.