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Tag >> Merrill Lynch
Besides death and taxes, one thing you can always count on is a lawsuit filed after a governmental regulatory action.
So, surprise, surprise, a major pension fund has filed a lawsuit against Bank of America stemming from its merger with Merrill Lynch.
As professional horrors go, they probably don't get a whole lot more unsettling than Joe L. Price's.
Posted by Stephen Taub in shareholders, shareholder acttivism, Securities and Exchange Commission, Sarbanes-Oxley, Merrill Lynch, executive pay, executive compensation, directors, compliance, CFO, CEOs, bonuses, Bank of America
Bank of America's agreement to pay $150 million to settle SEC charges also includes a bunch of corporate governance goodies designed to satisfy the activist shareholder set.
, of course, told you all about the settlement when it broke last week. The deal stems from charges that the financial giant failed to properly disclose employee bonuses and financial losses at Merrill Lynch before shareholders approved the merger of the companies in December 2008. Bank of America also said it entered into an agreement to settle charges with the Office of the Attorney General for the State of North Carolina related to the Merrill Lynch merger.
Of course, the proposed settlement will be submitted for approval to the Honorable Jed S. Rakoff of the United States District Court for the Southern District of New York. This is the same judge who last year rejected the original $33 million settlement.
The revolving door in financial services jobs shows no sign of stopping.
CIT Group, the commercial lender just emerging out of bankruptcy, hired John Thain as chairman and chief executive.
It's the same Thain who went on a spending spree to redecorate his new office when he joined Merrill Lynch just over a year ago, even though the bank was still suffering from bad bets on mortgages. Thain was also accused of hiding losses and extravagant bonus payments as Merrill Lynch was being sold to Bank of America.
But CIT is not the only firm with short-term memory.
I can't recall a case that shows how difficult a position corporate lawyers find themselves in these days than that of Bank of America.
Amid the allegations New York Attorney General Andrew Cuomo leveled against B of A's former CEO Ken Lewis and CFO Joe Price on Thursday is one that suggests Price violated the Sarbanes-Oxley Act by firing the bank's general counsel over a disagreement about what needed to be publicly disclosed about the pending Merrill Lynch acquisition.
Both President Obama and the lobby for corporate lawyers mistake banks for ordinary businesses, judging from their comments over the weekend.
As Paul Krugman points out today in his Times column, Obama took issue on at least one of the five talk shows he blitzed on Sunday with calls to crack down on excessive bankers' compensation by asking why we don't restrict the pay of NFL players or Silicon Valley execs.
This has not been a particularly good week for Bank of America boss Kenneth Lewis.
On Monday, Federal judge Jed Rakoff -- aka Judge Dredd -- rejected B of A's $33 million deal with the SEC to settle charges it has misled shareholders about the bank's 2008 acquisition of Merrill Lynch. Then, on Wednesday, New York state attorney general Andrew Cuomo reportedly subpoenaed five current and former Bank of America directors to find out exactly what they knew about Merrill's financial condition at the time of the shotgun marriage.
When you save a major financial institution from completely falling on its face, you'd expect a little gratitude, right?
Well, Bank of America found out this week that's not how its deal for Merrill Lynch is being viewed. At least not by the judicial system.
The deal for Mother Merrill was supposed to be a crowning achievement for B of A CEO Ken Lewis and the bank's board of directors.
But, hey, if they still feel that way, they're lucky, because it looks like they're going to relive the entire episode in excruciating detail.