The Securities and Exchange Comission and Bank of Amelrica on Monday defended the fairness of their proposed $33-million (Bt1.2-billion) settlement over executive bonuses paid out by Merrill Lynch, and the bank maintained it didn't mislead investors in the affairs.
In a court filing, Bank of America suggested that shareholders should have already known about the $3.6 billion in bonuses given the media attention surrounding its takeover of Merrill after it was first announced last September.
"There was no false or misleading statement or omission" in a proxy statement for voting shareholders, Bank of America said in its filing to US District Judge Jed Rakoff in Manhattan, who has held up approving the settlement. In addition, the bank noted that Merrill disclosed the size of its bonus pool when it reported financial results earlier in 2008.
With their separate filings, the SEC and Bank of America met the Monday deadline set by Rakoff two weeks ago for them to provide fuller information so that he can decide whether to approve the settlement announced on August 6. After a period of review, Rakoff could rule or order additional hearings.
The bank, without admitting or denying the allegations, agreed to pay the fine to settle charges that it misled investors about Merrill's plans to pay bonuses to executives even as it prepared to report billions in losses.
Bank of America is one of the biggest US banks as well as one of the largest recipients of aid under the government's financial bail-out programme, getting $475 billion. The SEC said in its filing that the government's capital investment in the bank doesn't change the standard the agency applied in arriving at the $33 million penalty.
Regulators have claimed that Bank of America had said in its proxy statement thatg it would not pay out bonuses to Merril employees in fiscal year 2008, when, in fact, the bank authorised bonus payments of as much as $5.8 billion.
The acquisition and bonus payments have caused Bank of America internal problems and angered shareholders. Bank of America's CEO Ken Lewis's management ability has beken questioned and shareholders stripped him of his chairman's title in April.
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