Are $127 million and some oversight provisions enough to placate Judge Jed Rakoff? Last September, Rakoff ferociously rejected a proposed settlement agreement under which Bank of America would have paid $33 million fines to settle a Securities and Exchange Commission lawsuit charging the bank with failing to notify shareholders that Merrill Lynch, which BofA purchased under pressure in late 2008, was going to pay as much as $5.8 billion in employee bonuses in early 2009.
Rakoff dismissed the proposed $33 million settlement as “trivial” and “absurd,” and wondered why the bank — and ultimately its shareholders — should pay the fine instead of the individual executives who committed the alleged disclosure violations. He even raised the possibility that BofA’s outside counsel at Wachtell, Lipton, Rosen & Katz might deserve some punishment.
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