Channeling his inner Oscar Wilde (and Lee Corso), judge Jed S. Rakoff had a message for BAC and the SEC on that proposed $33 million settlement: not so fast my friend. If the SEC is going to declare victory in the Merill bonus impropriety game, it's not going to be at the expense of shareholders. Citing the comedy Lady Windermere's Fan, the judge proved that there are those in the legal system tuned in to the symbiotic relationship forming between bailed out bank and failed regulator and overturned the Merrill bonus settlement.
The judge quoted Oscar Wilde's "Lady Windermere's Fan" in the end of his ruling to say that a cynic is someone "who knows the price of everything and the value of nothing."
The proposed settlement, the judge continued, "suggests a rather cynical relationship between the parties: the S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger; the bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth."
If the SEC is going to seal the deal they need to understand the new landscape. Shareholders don't pay for this sort of impropriety; multi-billion dollar taxpayer-funded bailout money does.