Compliance
SEC Files another Suit against BofA
The Securities and Exchange Commission (SEC) didn’t waste a breath in filing additional charges against Bank of America (BofA).
Reported by Ellie Behling
The SEC’s new complaint was filed in U.S. District Court for the Southern District of New York a day after a federal judge said the charges could not be added to its pending court case against Bank of America (BofA) (see “Judge Rejects New SEC Claims against BofA”). That case, filed in August, alleges that Bank of America (BofA) misled investors about billions of dollars in bonuses that were being paid to Merrill executives and will go to trial March 1.
The complaint filed yesterday alleges that BofA learned prior to the December 5, 2008, shareholder vote that Merrill Lynch had incurred a net loss of $4.5 billion in October 2008 and estimated billions of dollars of additional losses in November. “Bank of America erroneously and unreasonably concluded that no disclosure concerning these extraordinary losses was required as shareholders were called upon to vote on the proposed merger with Merrill Lynch,” the SEC said.
The SEC’s complaint charges BofA with violating Section 14(a) of the Securities Exchange Act of 1934 and SEC Rule 14a-9 by failing to make any disclosure to its shareholders of the losses Merrill Lynch incurred in the two-month period leading up to the shareholder vote.