Judge rejects Bank of America's $33M fine

NEW YORK, Aug. 11 (UPI) -- A federal judge in New York refused to accept a $33 million fine imposed on Bank of America for deceiving investors in its purchase of Merrill Lynch.

Bank of American did not admit to any wrongdoing in the pre-trial settlement with the Securities and Exchange Commission. But judge Jed Rakoff not only said the fine was too small, but told the SEC to name the executives responsible for the deception, The New York Times reported Tuesday.

Rakoff said the two financial firms "effectively lied to their shareholders," by paying Merrill Lynch employees $3.6 billion in bonuses after the deal closed in January.

Rakoff said the fine was "strangely askew" given the multi-billion-dollar deal and the $45 billion in government bailout funds Bank of America has accepted, much of it to help the bank absorb Merrill Lynch's losses.

"Do Wall Street people expect to be paid large bonuses in years when their company lost $27 billion?" Rakoff asked.

SEC and Bank of America attorneys defended their position, but Rakoff refused to budge, ordering a new hearing on the issue in two weeks, the newspaper said.