Friday, September 22, 2023
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Friday, September 22, 2023 | Back issues
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BofA Will Show SEC the Legal Advice|It Got Before Buying Merrill Lynch

MANHATTAN (CN) - Bank of America has agreed to show the SEC the legal advice it received before buying Merrill Lynch last year, a giant step in trying to dress up the allegations that Merrill agreed to hand out billions of dollars in bonuses even as it failed, that BofA approved the plan while accepting $45 billion in a taxpayers' bailout, and that both companies lied about the bonuses to shareholders. U.S. District Judge Jed Rakoff refused to accept the SEC's proposed $33 million settlement for the $3.6 billion bonus fiasco.

The SEC issued this statement this morning: "We have reached agreement with the Bank of America on proposed terms of a court order governing disclosure of information previously withheld on the basis of legal privileges. The order is subject to the approval of Judge Jed Rakoff. If entered by the court, the order would result in a broad waiver of the attorney-client and other legal privileges on matters that are the subject of our pending action against the Bank as well as ongoing investigation.

"In particular, the order negotiated by the SEC would allow us to assess further details surrounding the Bank's failure to disclose to its shareholders critical information concerning the award of bonuses to Merrill employees, including any relevant information previously withheld based on attorney-client or other privileges. In addition, the order would allow for investigation of previously privileged details of Bank of America's consideration of whether to invoke the material adverse change clause in its agreement to merge with Merrill Lynch, its decisions about whether to disclose impairment of goodwill of Merrill Lynch and other financial results of Merrill Lynch during the fourth quarter of fiscal year 2008, and its communications with the Federal Reserve Board, the U.S. Department of the Treasury, and other federal officials regarding the provision of federal assistance in connection with its merger with Merrill Lynch.

"The order would also authorize any information disclosed to the SEC to be disclosed to other governmental authorities, including federal and state regulators, so that they are able to assess the same information as the SEC."

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