Judge Rakoff says BofA-SEC deal suggests collusion
Below is a good video analysis by Jess Bravin of the Wall Street Journal on the BofA-Merrill Lynch saga. Bravin discusses the recent rejection by Judge Jed Rakoff of the out-of-court settlement between the SEC and Bank of America (BAC) in which BofA was to pay a miniscule $33 million fine.
Rakoff’s decision to scupper this settlement stems from his understanding that BofA shareholders are the ones who have allegedly been harmed by BofA’s actions. Yet they are also the ones to pay the fine. The SEC deal did not seek charges against bank management or lawyers. Management and attorneys were the alleged perpetrators of the false and misleading proxy statements that led to shareholder approval of the acquisition of Merrill Lynch. Bravin says Rakoff believes this may have been the result of collusion.
The settlement is a perfect example of regulatory capture and demonstrates why the financial system has failed.
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