BofA Makes SEC Charges on False Statements Go Away in a Hurry

[Update below]

Developing story: Apparently BAC screwed the pooch with misrepresenting the Merrill acquisition. Shocker. Will the SEC next pursue Hank Paulson and Ben Bernanke for enforcing this material misrepresentation? Mozillo's legal bill is already being footed by taxpayers, can we at least get a twoofer special here please?

From Bloomberg:

Aug. 3 (Bloomberg) -- Bank of America Corp. was sued by the U.S. Securities and Exchange Commission for allegedly making false claims about the purchase of Merrill Lynch & Co. in proxy statements. The SEC filed the suit in federal court in New York.

And this is the market's response:

Update: All is now taken care of - BAC settles with the SEC for $33 million, less than an hour after the suit becomes public. And... it's gone. The market ramp can now continue with commercial interruptions from the Federal Reserve of the United States.

Comments

[Alan Young:]

This has to go on record as the least-disputed lawsuit in Wall Street history.

Obviously, the SEC should have asked for a much larger penalty (or settlement), so there would be something to negotiate about. Oh, wait-- the negotiations were over before the suit was filed; that's the only possible explanation for the speed.

Insert your favorite cynical joke about the SEC representing the public interest here.

Aug 03 01:43 PM

[Joseph L. S...:]

In the military, we’d call the SEC a self-licking ice cream cone. Does it exist merely to extract enough inconsequential, love-tap-on-the-wrist fines to fund its own salaries and office expenses? Taxpayers and investors lose hundreds of billions to Madoff, Goldman, B of A and other liars and thieves, and the SEC thinks they’ve scored a major victory if they fine them from 0.001% to 1% of what they stole! Where's the deterrent? Where's the beef?

If you were B of A, would you stop collecting $3.3 billion in gains even if you knew for certain you’d be fined $33 million, or would you simply consider the 1% haircut on your gains a minor annoyance?

Fine them by forcing the fire sale of Merrill. Fine them by sending to prison each senior executive who colluded in these decisions. Make the punishment actually fit the crime. Then we might see a change in how the game is played.

Aug 03 01:46 PM

[Harry Tuttle:]

what is $33 million when they get several billion directly from the Treasury?

The SEC is a joke. They couldn't catch Madoff when it was obvious that he was running a Ponzi scheme and now they can even begin to make an example of a blatant violation of their rules by a major bank.

Too big to fail and too big to have to bother with the SEC

Aug 03 01:49 PM

[dcb:]

The omly solution is unrest

Aug 03 02:03 PM

[dcb:]

Good to knw that reform lasted all of two minutes

Aug 03 02:08 PM

[Leftfield:]

Seems the list of criminals is growing in Washington as well as Wall St. Plenty of AG's go after stupid stuff. If someone starts the ball rolling, gets a foot in the door, this will expose the biggest nest of thieves of all time.

Aug 03 02:15 PM

[User 465537:]

the money should go to the shareholders, not the government..

Aug 03 02:48 PM

[root:]

Although this may be viewed as a stupid comment. The robot picuture is probably the funniest yet most realistic view of market reaction I have scene yet.

Cheers.

Aug 03 03:02 PM

[MichaelJ007:]

yeah, but overdraft your checking account and BoA slams you. where's the justice?

Aug 03 03:49 PM

[Graham and ...:]

Another "win" for the SEC.But no real deterrence, here.

Aug 03 03:56 PM

[waf76:]

an SEC job must be a piece of cake

Aug 03 08:04 PM

[Sonic:]

Not to be a bearer of glad tidings, but it can only work for a while. Eventually even the presses run out of ink. The only problem is that while it will tear them down in the process, it is gonna suck big hairy nuts for everyone else.

Aug 03 09:22 PM

[Moon Kil Woong:]

Sadly, this is nothing new. The US has been penalizing the same firms (extorting money) for decades and then letting them continue their practice. I think they call it the cost of doing business. People in the industry probably don't even bother reading this case. It was settled long before the charges were made.

Aug 03 10:02 PM

[Gino Verza:]

Let's see if I get the picture.

BofA screws up and shareholders lose. BofA pays penalty and the shareholders lose again.

The authors of the screw up; well, thank you very much.

Accountability is such a great thing.

Aug 03 11:37 PM

[PainfullyAware:]

Down With Clowns !!!

If profits for nefarious action are greater than the fine - Who Truly Wins.

Aug 04 02:33 AM