SEC, BofA Reach Settlement as Cuomo Files Lawsuit


The New York Attorney General's office filed civil securities fraud charges against Bank of America and its former CEO Ken Lewis on Thursday, saying the bank misled investors about Merrill Lynch when it acquired the Wall Street bank last year.

Civil charges were also filed against Joe Price, the bank's former chief financial officer.

Ken Lewis stepped down from Bank of America on Dec. 31 after almost a year of strife that followed the bank's purchase of Merrill Lynch.  Bank of America has been accused of failing to properly disclose mounting losses at Merrill and bonuses paid to investment bank employees before the deal closed in late 2008.

In a press conference Thursday, Cuomo called Bank of America's actions "egregious and reprehensible" in deceiving not only shareholders, but also the federal government.

"We find it regrettable and are disappointed that the NYAG( New York Attorney General) has chosen to file these charges, which we believe are totally without merit," the bank said in a statement.

The suit came on the same day that The Securities and Exchange Commission it has expanded charges against Bank of America for failing to disclose big losses at Merrill prior to the bank's acquisition of the brokerage firm a year ago.  The SEC filed a a motion Thursday seeking court approval of a proposed settlement in which Bank of America will pay $150 million and strengthen corporate governance and disclosure practices to settle the charges.

Attorney General Andrew Cuomo asked eight major U.S. banks to turn over data on planned bonuses for 2009 last month amid a growing public outcry over payouts in light of the industry's role in the near-collapse of the financial system and the recession.

Copyright AP - Associated Press
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