The New York Times reported that Judge Jed S. Rakoff has refused to approve a $33 million deal “that would have settled a lawsuit filed by the Securities and Exchange Commission against the Bank of America.”
Judge Rakoff cited BOA’s disclosure of controversial bonuses paid to Merrill Lynch employees, which amounted to $3.6 billion and were paid out just before Merrill was acquired by BOA.
He accused the S.E.C. of failing in its role as Wall Street’s top cop by going too easy on one of the biggest banks it regulates. And he accused executives of the Bank of America of failing to take responsibility for actions that blindsided its shareholders and the taxpayers who bailed out the bank at the height of the crisis.
The SEC could appeal Judge Rakoff’s decision, drop the case, take it to trial against the bank, or pursue charges against individuals.