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U.S. markets recover from steep losses
WASHINGTON, Aug. 3 (UPI) -- Bank of America said Monday it would pay a $33 million penalty to settle charges it made false statements to investors when it purchased Merrill Lynch.
The bank said it would not admit to any wrongdoing in a case involving payment of bonuses to Merrill Lynch employees and how that information was divulged to investors.
A Securities and Exchange Commission lawsuit filed Monday claims Bank of America told investors that Merrill Lynch had agreed, prior to the sale, to not pay bonus compensation to its employees, The New York Times reported.
After the deal closed in early January, Bank of America agreed to let Merrill Lynch pay its employees $5.8 billion in bonus pay.
"Companies must give shareholders all material information about corporate transactions they are asked to approve," said Robert Khuzami, director of the SEC's division of enforcement.
"Failing to disclose that a struggling company will pay out billions of dollars in performance bonuses obviously violates that duty and warrants the significant financial penalty imposed by today's settlement," Khuzami said in a statement.
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