B of A Pays $33 Million for Investor Fraud

From the Washington Post:

The Securities and Exchange Commission on Monday charged Bank of America with lying to investors about its plan to pay billions of dollars in bonuses to employees of Merrill Lynch.

Bank of America, which bought the ailing investment bank this year, agreed to settle the charges and pay a $33 million penalty, according to the SEC. The company did not admit or deny wrongdoing.

The agency alleged that Bank of America violated securities law by telling investors in a November 2008 filing that bonuses would not be paid without its consent.

“In fact, Bank of America had already contractually authorized Merrill to pay up to $5.8 billion in discretionary bonuses to Merrill executives for 2008,” the SEC said in a statement. “The disclosures in the proxy statement were rendered materially false and misleading by the existence of the prior undisclosed agreement allowing Merrill to pay billions of dollars in bonuses for 2008.”

This case represents one of the highest profile instances so far of legal fallout from the financial crisis. The Bank of America settlement involves a company in which the U.S. government owns a large stake, having provided tens of billions of dollars in emergency relief.