Font Size: 
Judge Approves BofA's Waiver of Privilege
New York Law Journal
October 16, 2009
Southern District of New York Judge Jed S. Rakoff on Tuesday approved an order that will allow Bank of America to waive attorney-client privilege and work-product protection with regard to ongoing federal and state government inquiries at the same time that it continues to claim the privilege and protection in private lawsuits.
Faced with numerous probes into the bank's acquisition of Merrill Lynch, its board of directors last week agreed to make the material available. Under the order in Securities and Exchange Commission v. Bank of America Corporation, 09 civ. 6829, the bank and Merrill Lynch will turn over information generated between Sept. 1, 2008, and Jan. 16, 2009, relevant to the bank's alleged failure to disclose to its shareholders bonuses it anticipated making to Merrill employees at the time of the merger.
The order also covers communications with government agencies about the terms of federal assistance in connection with the merger; the disclosure or nondisclosure of information about Merrill's financial performance; and details of the bank's consideration of whether to scuttle the transaction by invoking a "material adverse effect" clause in its merger agreement.
The order negotiated between the SEC and the bank provides that the material will be shared with other government agencies, including New York Attorney General Andrew Cuomo. But it excludes the release of information to litigants in 58 private lawsuits. However, Judge Rakoff cautioned that the "cabined" waiver would not preclude any of the litigants in those actions from challenging the bank's assertion of privilege. The judge previously refused to approve a $33 million settlement between the bank and the SEC, and the SEC has indicated it might broaden its allegations against the bank. Both sides have requested a jury trial.
