Bank of America won't be able to quietly settle the flap over bonuses for Merrill Lynch execs with a simple $33 million payout to the SEC, a federal judge ruled yesterday. Judge Jed Rakoff refused to sign off on the settlement, saying that doing so would leave the public in the dark over whether the bank lied to shareholders and whether the $5.8 billion in bonuses it approved came from bailout funds. He scheduled a Monday hearing on the matter, Reuters reports.
The proposed settlement "in no way specifies the basis for the $33 million figure or whether any of this money is derived directly or indirectly from the $20 billion in public funds previously advanced to Bank of America as part of its bailout," Rakoff wrote. The SEC's lawsuit alleges that the bank deliberately misled shareholders by failing to tell them it had authorized billions in bonuses for Merrill Lynch execs ahead of their merger.