September 22, 2009

SEC may expand charges against BOA

The U.S. Securities and Exchange Commission said it may expand on allegations concerning Bank of America's purchase of Merrill Lynch in January.

Last week, federal Judge Jed Rakoff rejected a $33 million settlement between the bank and the SEC that concerned allegations that Bank of America misled shareholders when it purchased Merrill Lynch.

Faced with the perception the regulator was too soft on the bank, the SEC said it would vigorously pursue our charges against Bank of America and take steps to prove our case in court, The Washington Post reported Tuesday.

The SEC said, 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.

A Bank of America spokesman said the bank would vigorously defend ourselves in court.

Bank of America executives allegedly kept losses at Merrill Lynch from shareholders before the deal closed in January. In addition, the bank allegedly kept secret an agreement to pay Merrill Lynch employees billions of dollars in bonus checks despite Merrill Lynch's losses.