February 8, 2010 6:13 PM
Rakoff Chides SEC Lawyer at Hearing on BofA Settlement
Posted by Ed Shanahan
U.S. district judge Jed Rakoff put a Securities and Exchange Commission lawyer on the defensive Monday over a settlement resolving civil charges that accused Bank of America Corporation of misleading investors when it acquired Merrill Lynch & Co., Inc.
Sibling publication Corporate Counsel reports that Rakoff said at the Monday hearing in Manhattan district court that he hopes to rule by Feb. 19 on whether to approve the $150 million settlement--adding that he has additional questions to submit to the parties by Thursday about the pact, which officials announced last week.
The hearing came four days after New York attorney general Andrew
Cuomo filed civil fraud charges against the bank and two of its top
executives at the time of the merger.
A skeptical Rakoff read aloud some of the critical language from Cuomo's lawsuit--asking why the SEC didn't see it the same way and calling the versions of facts set forth by the SEC and by Cuomo "strikingly different."
George S. Canellos, a lawyer for the SEC, said the agency stuck to provable facts in its settlement deal.
Rakoff also raised questions about the firing of the bank's general counsel, Timothy Mayopoulos, shortly after a shareholder vote on the merger in December 2008 and about various parts of the settlement, such as whether the court should have a say in the hiring of an independent compensation consultant for the bank.
The judge must decide whether to approve the deal to pay shareholders $150 million. Last year, Rakoff rejected an earlier $33 million settlement stemming from the early 2009 acquisition.
In its story, Corporate Counsel also takes a close look at the role played by Mayopoulos in the events surrounding the controversial Merrill Lynch acquisition.Make a comment