U.S. District Judge Jed S. Rakoff has been unusually antagonistic toward Bank of America (NYSE:BAC) in their attempt to settle a lawsuit from the Securities and Exchange Commission (SEC) over allegedly not fully disclosing bonuses awarded executives and losses incurred by Merrill Lynch when shareholders were in the process of voting on whether to approve acquiring them or not.
Finally though, the judge has approved a settlement deal for $150 million between the bank and the SEC, although he couldn’t help himself in showing his ongoing disgust with the situation. Rakoff originally rejected a settlement for $33 million last year, leading to the larger settlement.
While Rakoff actually has a good command of the overall banking industry in relationship to law, as well as the nuances of some of the deals they undertake, he seems to have a personal vendetta in this case, and at times had the look of being activist to the point of trying to make someone pay for something that no individual had done.
For the SEC, there was more pressure on them for Rakoff, who evidently wanted to them to find a smoking gun somewhere, and when they didn’t, he was perturbed about it and pushed the SEC to dig deeper in what he considered, and still considers, Bank of America getting off easy.
This will probably be a blow to the dubious case against Bank of America from New York Attorney General Andrew Cuomo, who has filed fraud charges against the bank and two former leading executives, CEO Ken Lewis and CFO Joe Price.
As the SEC has stated plainly more than once they found no wrongdoing on the part of any individual at the bank, it’s obvious there is no case there, so it must be concluded all Cuomo is doing is grandstanding to get his name in the media for future personal political gain.
With a tough judge and the SEC both concluding there was no wrongdoing on an individual basis, this is a vast waste of time and taxpayers’ dollars to pursue a non-existent case.
