Bank of America settlement stopped by the judge

Federal Judge Jed Rakoff refused to sign-off on the Securities and Exchange Commission settlement with Bank of America (BAC) over $3.6 billion dollars in bonuses paid to Merrill Lynch employees. The SEC had agreed to a fine of only $33 million, but the judge said he was unable to determine if that amount was fair to the public.

At issue is the fact that Bank of America told investors in November 3 proxy materials that Merrill had agreed to hold off paying bonuses before the merger with BAC was completed, unless the bank consented. The bank omitted documents showing it had already approved the bonuses, according to the SEC complaint.