BAC having problems with a judge and now the NY Attorney General.
NEW YORK, Sept 16 (Reuters) - New York Attorney General Andrew Cuomo has
issued subpoenas to five Bank of America Corp directors to learn what they knew
about Merrill Lynch & Co's losses and bonuses while the companies were
preparing to merge, a person familiar with the probe said.
It was unclear which directors were issued subpoenas, but they include
'those most likely to have been briefed the most' about the merger in
November and December, the person said, requesting anonymity because Cuomo's
probe was ongoing.
Shareholders approved the merger on Dec. 5, and the merger closed on Jan.
1. About half of Bank of America's board has since turned over.
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NEW YORK (Dow Jones)--Money, or more precisely the lack of it, is at the
heart of the imbroglio that finds a federal judge accusing the Securities and
Exchange Commission of creating a "facade of enforcement" for trying to settle
charges Bank of America misled its shareholders.
That's the view of Arthur Levitt, who chaired the SEC longer than anyone
else. Speaking this morning on Bloomberg Radio, Levitt, who is now a Bloomberg
LP board member and an adviser to Goldman Sachs, said the SEC doesn't have the
resources to bring more civil enforcement cases to court. That's why it often
seeks settlements that typically allow accused companies to pay a fine while
neither admitting nor denying the charges.
U.S. District Court Judge Jed Rakoff's ruling Monday that tossed out the
SEC-Bank of America settlement is a "no win" situation for the SEC, Levitt
said.
You have a "reformist" SEC, he said, that will find it hard to back down now
that Rakoff has told the parties to hash it all out in court. Yet the SEC has
said in filings it doesn't have enough evidence against Bank of America's
managers, who allege they relied on advice from lawyers about how to word proxy
statements ahead of a shareholder vote on the acquisition of Merrill Lynch.
If quick settlements with alleged securities-rule violators are going to
receive closer scrutiny from judges and sometimes not pass muster, the SEC is
going to find itself in more of these binds.
SEC Chairman Mary Schapiro is going to have to appear before Congressional
committees looking into the Bank of America situation. She should use the time
to argue that bigger budgets would help the watchdog agency remove the cloud of
expediency that hangs over the "neither confirm nor deny" settlements that
don't pin responsibility on any individual.
In the meantime, maybe there's a way to move funds around internally at the
SEC so that more money is available for enforcement cases. When it comes down
to it, if enforcement isn't working, the SEC's reputation and purpose will
always be in jeopardy. |
