Bank of America to disclose Merrill details

The bank agrees to hand over previously undisclosed information about its purchase of Merrill Lynch to U.S. regulators.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Ben Rooney, CNNMoney.com staff reporter

New Orleans: A snapshot
Key financial firms received a wide range of assistance during the past year. But scroll over their stocks and youll find few winners and plenty of losers. More

NEW YORK (CNNMoney.com) -- Bank of America Corp. has agreed to share previously undisclosed information related to its purchase of Merrill Lynch with regulators investigating whether the company misled shareholders, the Securities and Exchange Commission said Tuesday.

The agreement would give regulators access to details concerning the bank's failure to disclose what it knew about pending losses at Merrill when it bought the troubled brokerage last year.

The move came after a federal judge last month rejected Bank of America's $33 million settlement with the SEC, which alleged the bank had misled investors about $3.6 billion of bonuses paid to Merrill employees.

The accord, which is subject to court approval, would "allow us to assess further details surrounding the bank's failure to disclose to its shareholders critical information concerning the award of bonuses to Merrill employees," the SEC said in a statement.

It would also give investigators details concerning whether BofA sought to invoke a "material adverse change clause" in its agreement to merge with Merrill, which would have allowed it to walk away from the deal.

BofA decided to release the information, which was protected under its attorney-client privilege, in response to "a lot of pressure in multiple venues for these additional documents," said Larry Di Rita, a Bank of America spokesman.

"We decided to waive [the privilege] in this case because we have nothing to hide," he said. "We acted appropriately in our deliberations and disclosures."

The SEC said the bank also agreed to give regulators access to its communications with the Federal Reserve, the Treasury Department and other federal officials regarding the provision of federal assistance in connection with its purchase of Merrill.

Bank of America (BAC, Fortune 500) chief Ken Lewis, who recently announced plans to step down at the end of the year, has argued that Fed and Treasury officials pressured him to buy Merrill, which was on the verge of collapse, to help stabilize the financial markets.

Lawmakers criticized Lewis in June for using the threat of scuttling the Merrill deal as a so-called "bargaining chip" for more government assistance.

BofA also faces investigations by Congress and New York State Attorney General Andrew Cuomo over its handling of the Merrill acquisition and subsequent bonus payments.

In a letter to Cuomo's office Monday, BofA said the newly disclosed details will also be available to state officials and Congress.  To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.