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from Rolfe Winkler:
Judge Rakoff wants facts! Notes from yesterday’s hearing
Hopped over to courtroom 14-B at 500 Pearl Street yesterday afternoon where I saw Judge Jed Rakoff hammer SEC and Bank of America lawyers over the proposed settlement regarding Merrill Lynch bonuses.
The news is that Rakoff refused to approve the settlement. He ordered the lawyers to get to the bottom of the "who/what/where" of the case, saying the settlement "seems to be lacking in transparency." He's asked them to file briefs answering those questions on the 24th, and then responses on September 9th.
The hearing itself was very interesting. Rakoff was clearly very skeptical of the arguments presented by both legal teams, which seemed rather unimpressive.
The judge wondered immediately why, given the "serious questions" raised in its complaint, the SEC wasn't going after more facts. If BofA and Merrill conspired to lie to shareholders about bonuses that had been agreed to when the merger was signed, then why isn't the SEC trying to figure out who is responsible? "Was it some sort of ghost? Who made the decision not to disclose [the bonuses]?" said Rakoff.
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The Wall
