BAC Settles with SEC Over Merrill Bonuses

Bank of America settled with the SEC over charges that it had made inadequate disclosures to its shareholders in connection with its acquisition of Merrill Lynch. The SEC charged that BAC misled investors about billions of dollars in bonuses that were paid to Merrill Lynch executives just prior to the closing of the acquisition. In proxy materials, BAC stated that Merrill had agreed that it would not pay year-end bonuses to its executives prior to the closing of the merger without Bank of America's consent. It turns out that BAC had already contractually authorized Merrill to pay up to $5.8 billion in discretionary bonuses to Merrill executives for 2008. BAC agreed to settle the SEC's charges and pay a penalty of $33 million. The SEC's complaint is here.

-bjmq