BofA Gets Away with Highway Robbery of the American Public
August 10, 2009 6:06 pm BlogCrime does pay…in this case it pays $5.8 Billion. Executives that caused the financial crisis write themselves a check for $5.8 Billion and then walk away without recourse. Those that authorized this travesty then pay a paltry in comparison $33 Million in penalties.
Form http://www.investmentadvisor.com/News/2009/8/Pages/BofA-To-Pay-SEC-33-Million-Over-Merrill-Bonuses.aspx
BofA to Pay SEC $33 Million Over Merrill Bonuses
The SEC says that Bank of America has agreed to settle the SEC’s charges and pay a $33 million penalty.
David Rosenfeld, associate director of the SEC’s New York Regional Office, said in a statement announcing the charges that, “As Merrill was on the brink of bankruptcy and posting record losses, Bank of America agreed to allow Merrill to pay its executives billions of dollars in bonuses. Shareholders were not told about this agreement at the time they voted on the merger.”
The SEC alleges that in proxy materials soliciting the votes of shareholders on the proposed acquisition of Merrill, “Bank of America stated that Merrill had agreed that it would not pay year-end performance bonuses or other discretionary compensation to its executives prior to the closing of the merger without Bank of America’s consent.” In fact, the SEC says, “Bank of America had already contractually authorized Merrill to pay up to $5.8 billion in discretionary bonuses to Merrill executives for 2008.” According to the SEC’s complaint, “the disclosures in the proxy statement were rendered materially false and misleading by the existence of the prior undisclosed agreement allowing Merrill to pay billions of dollars in bonuses for 2008.”
In settling the SEC’s charges without admitting or denying the allegations, the SEC says that “Bank of America consented to the entry of a judgment that permanently enjoins Bank of America from violating the proxy solicitation rules – Section 14(a) of the Exchange Act of 1934 and Rule 14a-9 – and orders Bank of America to pay the financial penalty.” The settlement is subject to court approval.
Also on August 3,Ken Lewis, chief executive officer and president of Bank of America Corporation, announced a number of changes to the company’s senior management team designed to enhance future success at the company.
The changes to the management team include the addition of Sallie Krawchek, most recently CEO of global wealth management at Citigroup to run BofA’s global wealth and investment management operation.
