CourtSide - The FindLaw Breaking Legal News Blog

SEC Sues Bank of America Over Merrill Lynch Bonus Payments

The S.E.C. sued the Bank of America on charges that it misled investors about billions of dollars in bonuses that were being paid to Merrill Lynch & Co. executives when it acquired the Wall Street firm for $50 billion. Without admitting or denying the allegations, Bank of America agreed to settle the SEC's charges and pay a penalty of $33 million.

According the the complaint (shown below), BOA sent shareholders proxy materials about the proposed merger telling them that it wouldn't pay Merrill execs their traditional year-end performance bonuses before closing its deal to aquire the investment house without first getting consent.

A prior undisclosed agreement allowed Merrill executives up to be paid up to $5.8 billion in bonuses for 2008, according to the S.E.C., but BOA's proxy statement disclosures were rendered materially false and misleading by failing to disclose this information.

You can read the SEC's complaint here:


Related Resources: