So what made the SEC think it could get a new and improved settlement through Judge Jed Rakoff? There are a host of upgrades. The corporate governance provisions are nice, as are the compensation guidelines, CEO and CEO certification requirements and all. In all there were seven remedial requirements. 

Of course, the $150 million settlement price is more than the original $33. And the attempt to use a Fair Fund to protect shareholders from essentially having to pay the penalty is interesting. Still, you get the idea that Jed Rakoff really wants closure on a couple of key issues. Obviously he would like to know more about why then-general counsel Timothy Mayopoulos was fired in December 2008. He also wants specifics on the role inside counsel and outside counsel in the form of Wachtell Lipton Rosen and Katz played in evaluating whether the bank should disclose Merrill's big losses to shareholders. 

Some signs point to a new interpretation of events. This interpretation holds that the firm advised the bank to disclose the losses but was marginalized by bank executives. That is the version of events in Cuomo's lawsuit, which claims Wachtell and the bank made plans to disclose the Merrill losses, but that the decision was suddenly "reversed" in late 2008 and Wachtell was shoved to the sidelines. According to The AmLawDaily, this version "contrasts sharply with the version of the disclosure talks the SEC and BofA have given Rakoff; in that matter, the SEC has filed papers claiming simply that the bank's "lawyers concluded that no additional disclosure was required," and that the bank listened to the advice of its counsel.  

The judge wants answers on all of this, but he seems to have given up on the idea that individual executives would be held accountable by the lawsuit. That was a bugaboo the first time around. All in all, it seems this settlement proposal has a fighting chance. 

Recall his conclusion about the first proposed settlement: A "contrivance designed to provide the SEC with the facade of enforcement." This one may be a step up but still may need work. - Jim