The Securities and Exchange Commission says it will “vigorously pursue” Bank of America Corp. in court with allegations that the bank misled shareholders when it prepared to purchase Merrill Lynch & Co. late last year.
Bank of America has 150 branches in the Dallas-Fort Worth area and ranks second in the Metroplex in terms of total deposits, according to research compiled by the Dallas Business Journal.
The SEC and BofA reached a settlement on the charges last month that required the bank to pay a $33 million fine. But U.S. District Judge Jed Rakoff rejected the deal, saying the corporate fine would further punish shareholders, not the persons suspected of misleading investors.
Charlotte-based BofA (NYSE:BAC) is accused of allowing Merrill to pay more than $3 billion in bonuses to its employees before the merger, but leading investors to believe such bonuses would not be paid.
After Rakoff rejected the proposed settlement, the SEC had to consider whether to drop the charges, submit a new settlement or proceed to court. The agency’s statement late Monday means BofA management will likely be required to defend its actions in open court.
Here’s the full statement from the SEC:
“As we alleged in our complaint last month, Bank of America did not provide investors with complete and accurate information about the bonuses to be paid by Merrill Lynch to employees. We believe that this disclosure failure violated the federal securities laws.
“We firmly believe that the settlement we submitted to the court was reasonable, appropriate and in the public interest. As we consider our legal options with respect to the court’s ruling, we will vigorously pursue our charges against Bank of America and take steps to prove our case in court. We will use the additional discovery available in the litigation to further pursue the facts and determine whether to seek the court’s permission to bring additional charges in this case.
“In deciding how to proceed, we will, as always, be guided by what the facts warrant and the law permits.”
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