Judge Rejects Deal Between SEC, BofA Over Bonuses

A federal judge on Monday rejected a $33 million settlement between the Securities and Exchange Commission and Bank of America Corp. over bonuses paid by Merrill Lynch.

U.S. District Judge Jed Rakoff called the proposed consent judgment "inadequate."

Rakoff wrote in an opinion that the $33 million settlement was a "trivial penalty for a false statement that materially infected a multi-billion-dollar merger."

Rakoff set a Feb. 1 trial date for the case. The SEC had filed civil charges against Bank of America, saying it misled shareholders about bonus payments given to Merrill Lynch employees.

Last month, Rakoff ordered the SEC to explain why it didn't pursue charges against specific executives at Bank of America over the accusations.

Charlotte, N.C.-based Bank of America agreed to acquire Merrill in a shotgun deal a year ago at the height of the credit crisis. It was later revealed that Merrill, with the knowledge of Bank of America executives, accelerated $3.6 billion in bonus payments before the deal was closed on Jan. 1.

Both Bank of America and the SEC did not provide immediate comment on the ruling.