Bernanke madoff: SEC Has Few Options—None of Them Good—in BofA Case <<~~ SEC is also slaved by the Fed. | 15 Sep 2009 | 06:08 PM ET
Stung by a federal judge's rejection of settlement efforts with Bank of America, the U.S. Securities and Exchange Commission has a few ways to proceed in the case. None is good.
U.S. District Judge Jed Rakoff blasted the $33 million accord to resolve charges the bank lied to shareholders about bonuses it let Merrill Lynch pay while it was buying that company, calling it a "contrivance" that violates "the most elementary notions of justice and morality." The Manhattan judge ordered the case to go to trial by Feb. 1.
The SEC can avoid this, but no option guarantees victory. It may ask the Second Circuit Court of Appeals to review Rakoff's decision. It may go to trial, and lose. It may dismiss the case despite saying the bank broke the law. It may craft a new accord, which Rakoff could reject. Or it may sue individual executives and lawyers after saying it lacked evidence......
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