Bank of America Faces Another SEC Suit

(January 15, 2010) – Bank of America faces another lawsuit, set to begin March 1, over its decision to acquire Merrill Lynch in 2008.

The U.S. Securities and Exchange Commission accused BofA of violating federal rules by failing to disclose extraordinary losses at Merrill before shareholders voted on a merger of the companies on Dec. 5, 2008. Merill lost $4.5 billion in October 2008 and billions more in November of that year. Merrill later reported a net loss of $27.6 billion for 2008.

The SEC suit, filed in Manhattan federal court, against BofA comes a day after U.S. District Judge, Jed Rakoff, ruled that the SEC couldn’t add the allegations to its existing case against the bank for $3.6 billion of bonuses paid by Merrill, according to Reuters. 

“Their allegations are totally without merit,” said Robert Stickler, a Bank of America spokesman, to the Wall Street Journal. “We look forward to presenting the facts in court.”

The allegations against BofA represent another lawsuit in a string of suits against the nation’s banks related to lack of disclosure and harming shareholders following the 2008 financial crisis.