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SEC Seeks To File New Charges Against BofA On Merrill Deal, Full SEC Letter Attached

Tyler Durden's picture


A little early for that retirement party Kenny?

From the WSJ:

The Securities and Exchange Commission is seeking permission to add new charges against Bank of America for failing to disclose Merrill Lynch's "extraordinary losses" in time for the shareholder vote on its takeover.

According to the SEC's letter, by the time shareholders voted on the Merrill deal December 5, 2008, Bank of America was aware that Merrill had suffered $4.5 billion in net losses during October and had estimated an additional multi-billion-dollar loss for November.

The SEC alleges that those losses constituted more than one-third of the deal's value and approximately 60% of Merrill's entire losses in the preceding three quarters, representing a fundamental change to the deal.

"Nevertheless, despite its representation that it would update shareholders, BOA kept them in the dark as they were asked to vote on the proposed merger," the SEC said in its letter to the judge.

The SEC said failing to make new disclosures about the losses "violated BOA's express undertaking to update shareholders of fundamental changes," making the proxy disclosures "false and misleading."

Bank of America said in a statement Monday: "We are disappointed that more than two months after the court-imposed deadline to amend its complaint and in the absence of any new information, the SEC now at the 11th hour is nevertheless trying to add new charges. With a trial set to begin in approximately six weeks, this would materially hinder our ability to mount a defense.

The case is scheduled for trial on March 1.



Full SEC Letter



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Mon, 01/11/2010 - 16:13 | Link to Comment bugs_
bugs_'s picture

Interesting that BAC isn't rolling over and playing dead.

They are still displaying an arrogance that they should

have been able to switch off after Ken left.

Tue, 01/12/2010 - 11:14 | Link to Comment ATG
ATG's picture

Judge RakeOff says it all...

Mon, 01/11/2010 - 16:25 | Link to Comment ShankyS
ShankyS's picture

$25,000 fine and admit no wrongdoing. I mean my two year old could answer that question. SEC, LMAO. Oooooh I'm scared.

SEC = Special Executive Comedian

Mon, 01/11/2010 - 18:51 | Link to Comment ShankyS
ShankyS's picture

LOL - I guess my etsimated penalty would have been too strict.

Mon, 01/11/2010 - 16:32 | Link to Comment Anonymous
Mon, 01/11/2010 - 16:32 | Link to Comment Anonymous
Mon, 01/11/2010 - 16:55 | Link to Comment Number 156
Number 156's picture

'SEC to prosecute us?'


Mon, 01/11/2010 - 16:59 | Link to Comment Anonymous
Mon, 01/11/2010 - 17:01 | Link to Comment Anonymous
Mon, 01/11/2010 - 17:02 | Link to Comment Anonymous
Mon, 01/11/2010 - 17:12 | Link to Comment Anonymous
Mon, 01/11/2010 - 17:13 | Link to Comment deadhead
deadhead's picture

one of the more interesting things about this, to date at least, is how the SEC originally tried to play the "no big deal" game and assess an incredibly measly fine of 33 million bucks.

once taken to task by Rakoff (and the public?), the SEC now comes barrelling out with additional charges.

is the new rule of law that prosecutors go easy on their buds unless the public becomes aware of it, then they do the job they should have in the first place?

I don't know whether to laugh or cry, really.

the USA has become a big pile of shit.


Mon, 01/11/2010 - 17:31 | Link to Comment buzzsaw99
buzzsaw99's picture

Basically, if your name is Kenny, whether it be on Wall Street or South Park, you are doomed to bite the big one before the end of every episode.

Mon, 01/11/2010 - 17:44 | Link to Comment Anonymous
Tue, 01/12/2010 - 00:10 | Link to Comment Anonymous
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