Judge questions SEC $150 million accord with BofA

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MAYOPOULOS ROLE
In its lawsuits, the SEC accused the bank of hiding Merrill's mounting fourth-quarter 2008 losses, and misleading shareholders about the USD 3.6 billion of bonuses it let Merrill pay in 2008. The quarterly loss would total USD 15.8 billion.

Cuomo last week alleged that Bank of America fired Mayopoulos on Dec. 10, 2008 after he had been misled about the scope of Merrill's losses, and had confronted Price following the shareholder vote about those losses.

But at Monday's hearing, George Canellos, regional director of the SEC's regional office, suggested that the replacement of Mayopoulos as general counsel with Brian Moynihan may have been motivated by a desire to keep Moynihan from leaving, rather than be replaced by Merrill's chief executive, John Thain.

Saying that a press release was being prepared to announce Moynihan's departure, Canellos said there was "a bit of a fire drill" at Bank of America to keep that from happening.

Moynihan replaced Lewis last month as chief executive.

The governance and disclosure changes in the settlement would include giving shareholders a voice on executive pay, and posting incentive pay practices in a prominent place on the bank's website, among other things.

Bank of America shares fell 45 cents, or 3 percent, to USD 14.55 in afternoon trading on the New York Stock Exchange. They traded at USD 33.74 before the Merrill merger was announced on Sept. 15, 2008.

The federal cases are SEC v. Bank of America Corp, U.S. District Court, Southern District of New York, Nos, 09-06829 and 10-00215. Cuomo's case is New York v. Bank of America Corp et al, New York State Supreme Court, New York County, No. 450115/2010.