The Securities and Exchange Commission asked Judge Jed Rakoff to widen the case that bank executives failed to disclose Merrill Lynch's bonus pay to shareholders before they voted on the acquisition to also include failure to disclose losses Merrill Lynch sustained the months leading up to the shareholder vote.
Rakoff said the SEC could open another case, but denied their attempt to expand on the bonus pay case now in court, The New York Times reported Tuesday.
In October, Rakoff rejected a $33 million settlement in the bonus pay case, saying it was too low and he questioned whether shareholders, the victims in the case, would end up paying the fine through decreased dividends.
The Times said the SEC and the bank are negotiating a new settlement, in part directed by Bank of America's new Chief Executive Officer Brian Moynihan's desire to get past the bank's legal troubles.
"It's a balance between the attention-grabbing headlines and settling too early," said bank analyst John McDonald at Sanford C. Bernstein.
Copyright 2010 by United Press International.