A federal judge Monday approved a $150 million settlement between the Securities and Exchange Commission and Bank of America, but derided the regulator's decision to settle with the bank over allegations it lied to investors as "half-baked justice."
After rejecting a much more modest $33-million settlement last year, Judge Jed S. Rakoff of the Southern District of New York said he considered a new expanded agreement to be "inadequate and misguided" because its penalties are "very modest."
Bank of America must pay the fine and agree to a host of other changes designed to improve oversight of the company by its board of directors.
The case arose out of Bank of America's purchase of Wall Street investment firm Merrill Lynch in 2008. The SEC alleged that in seeking shareholders' approval for the deal, Bank of America failed to tell investors of mounting financial losses at Merrill and plans to pay its employees billions in bonuses.
Rakoff's grudging endorsement of the settlement underscores lingering uncertainty over whether the SEC probed as deeply as possible to determine whether individual executives should be held accountable for alleged wrongdoing.
- The Washington Post