Judge Jed Rakoff is still not satisfied with the explanations given by Bank of America and the SEC in support of their $33 million settlement. The deal was supposed to end the issue of whether Bank of America mislead shareholders by not disclosing those multi-billion Merrill Lynch bonuses.

But the judge seems to want to get past the boilerplate and get some real answers. The settlement appears to let Bank of America executives off light; Rakoff may believe the SEC was remiss in not holding executives accountable for a false proxy. The deal did not call for the bank to admit wrong-doing. The judge has asked both sides to submit more information by September 9.

I think we all know that defendants often push for this because to admit guilt would open the floodgates to civil litigation. It seems the prosecution buys into that. But letting people get away without admitting any guilt doesn't always sit well. As for the specific argument that the bank was relying on its lawyers, the judge wasn't buying it. The Reuters suggests it may raise another issue: "If it was actually the lawyers who made the decisions that resulted in a false proxy statement, they should be held legally responsible."

For more:
- here's an Reuters article

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