SEC to expand Bank of America charges

The regulator said it would ask the U.S. District Court in New York permission to charge the bank with failure to disclose the extent of Merrill Lynch losses as it sought to purchase Merrill Lynch last winter.

The bank has already been changed with failing to tell shareholders about an agreement to pay Merrill Lynch employees bonus checks despite the losses it suffered in the financial meltdown.

The new complaint alleges Bank of America knew that Merrill Lynch had lost $4.5 billion in October and billions more in November of 2008 before shareholders voted to approve the acquisition on Dec. 5, 2008.

"The actual and estimated losses together represented approximately one-third of the value of the merger at the time … and more than 60 percent of the aggregate losses Merrill Lynch sustained in the preceding three quarters combined," the SEC said Monday in a statement.

Allegedly, "Bank of America erroneously and negligently concluded that no disclosure concerning these extraordinary losses was required as shareholders were called upon to vote on the proposed merger," the SEC said.

Copyright 2010 by United Press International.