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from Rolfe Winkler:
Rakoff throws down the gauntlet
Judge Rakoff has rejected the settlement deal between the SEC and Bank of America. He clearly wasn't happy with it to begin with, and subsequent briefs from the two parties did nothing to allay his concerns. At the end of the day, he hated the idea that B of A shareholders, on whose behalf the SEC actually brought the case, would end up paying the fine for executives' wrongdoing.
So what's the next step? According to the Reuters story, "Rakoff directed the parties to prepare for a possible trial that would begin no later than February 1, 2010."
That doesn't mean there will be a trial. The parties could come back with a settlement more to Rakoff's liking.
But presumably that would have to involve naming names. Who were the executives responsible for misleading shareholders? B of A has refused to answer that question and the SEC seems to think it doesn't have the leverage to force it out of them.
from Rolfe Winkler:
The infamous “disclosure schedule”
At the bottom is the SEC's latest brief for Judge Rakoff.
Having gone through BofA's, one finds --publicly disclosed for the first time -- the "disclosure schedule" that outlined bonuses BofA had agreed Merrill could pay:
“Variable Incentive Compensation Program (‘VICP’) in respect of 2008 ... may be awarded at levels that (i) do not exceed $5.8 billion in aggregate value (inclusive of cash bonuses and the grant date value of long-term incentive awards)...
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.
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The Wall
