The Financial Times continues to get scoops in the Merrill Lynch/Bank of America bonus scandal.
Today it reports that the Securities and Exchange Commission is “reviewing” whether BofA illegally misled shareholders by not telling them about the$3.6 billion in bonuses Merrill paid out in 2008 despite losing $28 billion, getting bailed out by taxpayers and having to be rescued by a big bank, which it has since nearly dragged under.
BofA says it didn’t have to disclose that to shareholders voting on whether the company should buy Merrill. $3.6 billion isn’t material?
Federal securities law prohibits institutions from “omitting material facts” in connection to the purchase or sale of securities.
This is the third separate inquiry into the matter. Its story was prompted by a response from the SEC chairwoman to Congressman Dennis Kucinich who’s investigating the Merrill bonuses in the House.
Again, like AIG, Merrill would have most likely have been in bankruptcy without government intervention.
Good for the FT for staying on top of this one.