Judge orders Bank of America to trial

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NEW YORK, Sept. 14 (UPI) -- Federal Judge Jed Rakoff Monday ordered the case of Bank of America's purchase of Merrill Lynch to go to trial in New York, rejecting a settlement offer.

Bank of America and the Securities and Exchange had agreed to a $33 million fine for allegedly failing to disclose to shareholders an agreement to pay Merrill Lynch employees $5.8 billion in bonus checks after the deal to buy Merrill Lynch closed in early January.

Rakoff ruled that the $33 million fine, in effect, would have been levied, not on the perpetrators of the fraud, but on the victims -- the shareholders who would have taken the $33 million hit as the bank paid the fine, The Wall Street Journal reported.

"It does not comport with the the most elementary notions of justice and morality, in that it proposes that the shareholders who were the victims of the bank's alleged misconduct now pay the penalty for that misconduct," Rakoff wrote in his ruling.

He set a trial date for Feb. 1.

The $33 million fine "is neither fare, nor reasonable, nor adequate," he wrote.