Why the hold up in SEC-B of A case?
Reporter Tamara Keith talks with Steve Chiotakis about why a judge is still refusing to sign off on a $33 million settlement between the SEC and Bank of America, and what's next in the case.
Mount Wilson is seen behind a Bank of America branch in Pasadena, Calif. (David McNew/Getty Images)
More on Crime - Law
TEXT OF STORY
Steve Chiotakis: A judge is, at least for now, still refusing to sign off on a $33 million settlement between the Securities and Exchange Commission and Bank of America. At a hearing yesterday, the judge had tough questions for both the government and the bank. Tamara Keith joining us live now from our bureau in Washington. Good morning Tamara.
Tamara Keith: Good morning.
Chiotakis: A little history here?
Keith: Yeah, this all goes back to the Bank of America-Merrill Lynch merger. The SEC says B of A failed to tell shareholders about $5 billion in bonuses that it had agreed to pay out to Merrill executives.
Chiotakis: And what is the judge's concern with this settlement?
Keith: Well for starters, where did that $33 million figure come from? We're talking billions of dollars in bonuses here, and the fine is in the low millions. But more significantly, the judge made it clear yesterday he wants to know who is responsible for deceiving shareholders, and we're talking about naming names here. He wants some names. Bank of America is saying though, they didn't even do anything wrong.
Chiotakis: And what does this hold up mean for the SEC? I mean they've taken a lot of heat for not being tough enough, or at least not appearing to be.
Keith: That's right. And one law professor I spoke to said that he thought the SEC's rush to settle this thing is all about improving his image and proving that it was the tough cop on the block, but the judge is saying, 'hey, you're not tough enough,' which probably isn't what they want to hear.
Chiotakis: And what's next in the case?
Keith: Well both the bank and the SEC are supposed to respond the judge's questions in two weeks.
Chiotakis: All right. Tamara Keith joining us from Washington. Thanks Tamara.
Keith: Thanks.
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