The Associated Press is reporting that a New York judge with the U.S. District Court has decided not to sign off on a proposed Bank of America-Securities Exchange Commission (SEC) settlement agreement for Bank of America to pay a $33M fine for misleading investors regarding its agreeing to pay out nearly $5.8 Billion (though only $3.6 Billion were eventually doled out) in bonuses to Merrill Lynch employees.
The judge didn’t understand how the government and Bank of America came up with the $33M figure nor did he feel this figure appropriately addressed the severity of the alleged violations and crux of the case against Bank of America.
For perspective, $33M is less than 1% of the total payout in bonuses.
Does anyone really believe that a penalty of less than 1% of the value of the bonuses will have any effect other than to let Bank of America and other banks know that they SHOULD continue to pay out hefty bonuses despite receiving taxpayer money in the bailout as the government penalty will be anything but a pittance?
Not a bad deal for Bank of America and executives - just the taxpayer. Can anyone tell me what exactly does the SEC do when you see things like this?
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