Skip to: Content
Skip to: Site Navigation
Skip to: Search
THURSDAY, NOVEMBER 26, 2009
| Subscribe to Newser's RSS feeds RSS | Follow Newser on Twitter Twitter


5

BofA Settles SEC Suit Over Merrill Bonuses for $33M

Commission says bank misled investors over Merrill payout

Share

(Newser) – Bank of America will pay $33 million to settle a federal lawsuit, filed today, which says the bank misled its investors, Reuters reports. During its takeover of Merrill Lynch, the lawsuit charges, Bank of America told investors Merrill wouldn’t pay bonuses without BoA’s permission before the deal closed. But, the Securities and Exchange Commission holds, BofA had “contractually authorized” Merrill to pay $5.8 billion in bonuses, the Wall Street Journal adds.

Companies must tell investors of activities that could affect the market. “Failing to disclose that a struggling company will pay out billions of dollars in performance bonuses obviously violates that duty and warrants the significant financial penalty imposed by today’s settlement,” said an SEC official.

A security guard monitors the entrance to the Merrill Lynch Financial Center in London, March 6, 2009.
A security guard monitors the entrance to the Merrill Lynch Financial Center in London, March 6, 2009.   (AP Photo)
A Bank of America branch in San Francisco
A Bank of America branch in San Francisco   (AP Photo)
People move past a Bank of America branch in downtown Philadelphia, May 7, 2009.
People move past a Bank of America branch in downtown Philadelphia, May 7, 2009.   (AP Photo)
« Prev« Prev | Next »Next » Slideshow
OFF THE GRID
11.24.09
Murdoch and Microsoft: The Mice Are Trying to Roar
11.23.09
Books Are Bad for You
5 comments
VIEWING:
 
DavoMax
Aug 3, 09 1:33 PM CDT
Can someone explain where the penalty money goes. In the governments back pocket? Reply
Vote up! Vote down!
+1
mickey61988
Aug 3, 09 1:35 PM CDT
33 million, big deal. That's nothing to these guys. Reply
Vote up! Vote down!
+1
Newser001
Aug 3, 09 1:40 PM CDT
Here are a few examples of industry bonuse schemes that make little sense: 1.) In 2008 Goldman Sachs paid $4.8bn in bonuses, representing more than twice its income. 2.) Similarly, Morgan Stanley awarded bonuses of $4.5bn while earning just $1.7bn. 3.) Citigroup and Merrill Lynch paid bonuses of $5.33bn and $3.6bn respectively while seeing losses of more than $27m each. The bonus systems within the securities industries' is deeply flawed. A report, by the office of New York Attorney Andrew Cuomo, said there was "no clear rhyme or reason" for the pay schemes. So, again I ask, how can one justify Top US banks paying out huge bonuses despite gaining taxpayer bail-outs? Reply
Vote up! Vote down!
+2
IN RESPONSE:
Reader64481089
Aug 3, 09 1:43 PM CDT
They always reply the same Corporate line..."We have to pay large bonuses to keep out top talent!!"...Well here is a news flash, if you take in less than you pay out your "Top People" are screwing everyone involved and you might be better of hiring the guy on the corner holding the sign "Will Work For Food" at least even when being dishonest he keeps track of his income.
Vote up! Vote down!
+1
IN RESPONSE:
mainlander
Aug 3, 09 2:06 PM CDT
They lose a little on each bonus, but make it up with volume. :-)
Vote up! Vote down!
-1
LEAVE A
COMMENT Comment Policy
Facebook ConnectPost this comment to Facebook?

After connecting you will have the option to post your comment on your Facebook profile.

 

Related Newser Stories

119 Stories

 Pay Czar Cuts 
 Bonuses, But 
 Boosts Salaries 

Feinberg beefs up base base to help firms retain talent

Oct 28, 09 1:24 AM CDT
(Newser) - Base pay will increase for the majority of top execs in the finance and auto firms supervised by federal pay czar Kenneth Feinberg. Salaries are being bumped up—by hundreds of thousands of dollars in some cases—as bonuses and other perks are slashed. Despite the salary hikes, all 136... More »

MORE ABOUT:
Chrysler • Citigroup • executive compensation • Bank of America • General Motors • AIG • bonuses • executive bonuses • Kenneth Feinberg • pay czar

 29-Year-Old SEC Honcho 
 Came From Goldman 

New COO Adam Storch did 'business intelligence' at connected Wall Street bank

Oct 16, 09 2:08 PM CDT
(Newser) - The first person named to the new chief operating officer position in the SEC’s enforcement division is a 29-year-old whiz kid who previously worked at uber-connected Goldman Sachs, Bloomberg reports. "Adam’s skill in technology systems, workflow process, and project management will greatly benefit the division," his... More »

MORE ABOUT:
fraud • Goldman Sachs • Bill Clinton • SEC • Federal government • COO • regulator • Securities and Exchange Commission • Adam Storch • chief operating officer • enforcement • Robert Khuzami

Hedge Fund Founder Nabbed for Insider Trading

Raj Rajaratnam's $3B Galleon Group trades tech stocks

Oct 16, 09 11:03 AM CDT
(Newser) - The founder of a $3 billion hedge fund and two other financial executives have been charged with insider trading, the Business Insider reports. Raj Rajaratnam, whose Galleon Group focuses on high tech stocks, was charged with conspiracy and fraud related to trades of Hilton and Google stock, among others. Execs... More »

MORE ABOUT:
insider trading • SEC • hedge fund • conspiracy • bank fraud • criminal charges • Securities and Exchange Commission • Raj Rajaratnam • Galleon Group

119 Stories


Business  •  Crime & Courts 
TwitterFollow @NewserBusiness on Twitter

 
Bank of America • investors • Merrill Lynch • SEC • lawsuit • bonuses • defrauding investors • Securities and Exchange Commission

from our news partners