Bank of America Corp. on Monday defended itself from claims it misled investors about bonus payouts at Merrill Lynch & Co.
The $2.3 trillion-asset Charlotte company said in a filing to federal judge Jed Rakoff that it was "widely understood" through various Merrill public disclosures that the investment bank "intended to pay multibillions of dollars in yearend incentive compensation."
Rakoff has refused to sign off on a $33 million settlement between B of A and the Securities and Exchange Commission over disclosures about what turned out to be $3.6 billion in bonuses to Merrill employees awarded before B of A's purchase closed Jan. 1. The SEC has claimed that the sale's proxy statement showed the bonuses would not be paid without B of A's approval.
Bank of America, which neither admitted or denied wrongdoing in the settlement, said in Monday's filing in U.S. District Court for the Southern District of New York: "There was no false or misleading statement or omission in the proxy statement," and it never gave investors the impression that bonuses were barred. Finally, the company asserted that the SEC settlement was "a constructive conclusion to this matter."
Separately, Bank of America moved to put another Merrill-related issue behind it, agreeing to pay $150 million to settle claims that the New York investment bank misled investors about the sale of bonds and preferred stock. Rakoff gave the settlement preliminary approval last week; final approval should come at a Nov. 23 hearing.
