Tuesday, August 25, 2009
Judge Rakoff still isn't satisfied with the explanations given to him by the SEC and the Bank of America about the settlement involving the disclosure (or lack thereof) of Merrill bonuses in the BofA proxy statement. He instructed the SEC to provide more explanation about why it didn't follow SEC policy and seek penalties from individual defendants. He also didn't accept the agency's explanation that its hands were tied because the corporation asserted reliance on advice of counsel as a defense and would not waive the attorney client privilege and give the SEC the documents. How could the corporation base a defense on attorneys' advice without disclosing the advice? The judge asked for further submissions due Sept. 9. WSJ, SEC Ordered to Explain Handling of BofA Case.
The standard for judicial review for negotiated settlements, in case you're wondering, is that the judge should give deference to the agency and approve the settlement so long as it is reasonable and in the public interest.