Banking, finance, and taxes
B of A Hot Seat Continues (BAC)
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Bank of America Corporation (NYSE: BAC) has a couple of issues on the legal and regulatory front for this week. Last night, it announced that it has reached an agreement with the U.S. government over asset guarantees. The company also has to now go to court over the thrown out SEC settlement.
The settlement is to terminate the banking giant’s term sheet up to the guarantee of up to $118 billion in assets by the government. This term sheet was executed in connection with the Bank of America controversial acquisition of Merrill Lynch back in January. Under the terms of this agreement, Bank of America will pay out $425 million in cash to the Treasury Department, Federal Reserve and FDIC.
Elsewhere, Bank of America is going to be in the hot seat all over again regarding that “reached and then rejected” $33 million settlement over bonuses with the SEC. The judge threw out the settlement out over it not being anywhere near a broad enough punishment. Now the SEC has said it will vigorously pursue the bank in civil charges.
There is also a House of Representatives panel that is considering a subpoena of further records. There is also the notion that the board of directors will have to weigh options if certain top executives are indicted or charged in the bonus issue.
Oddly enough, this is not hurting the bank’s shares. With 90 minutes until the open, B of A shares are up almost 2% at $17.58.
JON C. OGG
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