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Probe grows on BofA over Merrill losses
THE United States Securities and Exchange Commission has expanded its probe of Bank of America to include possible failure by the bank to disclose mounting losses at Merrill Lynch, according to a top agency official.
The SEC is pursuing civil charges against BofA over the failed disclosure to shareholders of bonuses to Merrill employees after it was acquired by the second-largest US bank.
But when Ohio Democratic Representative Dennis Kucinich asked at a hearing on Friday whether the agency has widened its investigation to include the disclosure of losses at Merrill, SEC Enforcement Director Robert Khuzami said: "That's a yes."
The SEC has been "and (is) looking at all aspects" related to Bank of America's disclosures to shareholders before the merger was approved last December, Khuzami said.
The agency "will continue to vigorously pursue our charges against Bank of America and take all necessary steps in an effort to prove our case in court," he said.
A federal judge threw out a proposed US$33 million settlement in September and rebuked the SEC for not pursuing charges against individual executives of North Carolina-based Bank of America.
As the litigation proceeds, "We may get additional information and we'll take that into account in making our decision," Khuzami said. He noted that a higher level of proof, showing knowledge or reckless conduct, is required to make a case against individuals as opposed to firms.
BofA "is the test case" for the SEC's enforcement efforts, Kucinich declared.
The House Oversight and Government Reform Committee has been examining for seven months BofA's takeover of Merrill and the role of government officials in the US$45 billion federal rescue of the bank.
The SEC is pursuing civil charges against BofA over the failed disclosure to shareholders of bonuses to Merrill employees after it was acquired by the second-largest US bank.
But when Ohio Democratic Representative Dennis Kucinich asked at a hearing on Friday whether the agency has widened its investigation to include the disclosure of losses at Merrill, SEC Enforcement Director Robert Khuzami said: "That's a yes."
The SEC has been "and (is) looking at all aspects" related to Bank of America's disclosures to shareholders before the merger was approved last December, Khuzami said.
The agency "will continue to vigorously pursue our charges against Bank of America and take all necessary steps in an effort to prove our case in court," he said.
A federal judge threw out a proposed US$33 million settlement in September and rebuked the SEC for not pursuing charges against individual executives of North Carolina-based Bank of America.
As the litigation proceeds, "We may get additional information and we'll take that into account in making our decision," Khuzami said. He noted that a higher level of proof, showing knowledge or reckless conduct, is required to make a case against individuals as opposed to firms.
BofA "is the test case" for the SEC's enforcement efforts, Kucinich declared.
The House Oversight and Government Reform Committee has been examining for seven months BofA's takeover of Merrill and the role of government officials in the US$45 billion federal rescue of the bank.
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