In a filing on Monday, Bank of America told Judge Jed Rakoff of Manhattan federal court that it did not mislead shareholders about its approval of up to $5.8 billion of bonuses, saying it was widely understood that Merrill would pay out billions.
Meanwhile, the US Securities and Exchange Commission said that the largest US bank was wrong not to tell shareholders about the payouts, but that a settlement strikes a fair balance between deterrence and not punishing shareholders further. Reasonable people can debate whether the penalty should be higher or lower, but it is squarely within an acceptable range, the SEC said. Rakoff rejected the settlement on August 10, demanding many more details about who knew what and when about the bonuses, including the decision not to reveal what would become $3.6 billion of bonus awards. The merger closed on January 1.