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BofA Settles SEC Suit Over Merrill For $33M
by Paula Schaap ,Senior Reporter , August 3, 2009

The Securities and Exchange Commission extracted a $33 million settlement from Bank of America Monday over about $5.8 billion in bonuses paid to executives at Merrill Lynch & Co. at the time of Merrill’s acquisition.

The SEC alleged in a federal lawsuit filed Monday that when Bank of America asked its shareholders to approve the takeover, it told them it wouldn’t pay 2008 bonuses to Merrill’s executives. However, the agency claimed, what Bank of America didn’t tell its shareholders was that it had already agreed to lay out about $5.8 billion in Merrill bonus pay. That bonus pool represented about 12% of the $50 billion merger deal.

Bank of America did not admit or deny the allegations in the SEC complaint.

The furor over bonuses caused ex-Merrill Chief Executive Officer John Thain his job. It also led Congress to grill Bank of America CEO Kenneth Lewis. Shareholders ousted Lewis from his slot as chairman of the bank, although he is still the CEO.

Bank of America could not be immediately reached for comment.
  
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