SEC Faces Scrutiny of Bank of America Settlement

The issue of CEO pay is a continuing to spark heated debate among traders and investors. The latest in this recent saga occurred; when the SEC was scrutinized by a federal judge over the $150 million settlement with Bank America. What happened was; U.S. District Court Judge Jed Radkiff said that the allegations in the law suits from the SEC and the New York Attorney General are significantly different. Where, he wanted to examine the role that the law firm Wachtell Lipton Rosen & Katz LLP played; in helping Bank America determine what they would be disclosing to investors. This is significant, because Judge Radkiff has publically said that the SEC has been very timid in their handling of the Bank America case. Evidence of this, can be found by looking no further than the fact that Judge Radkiff threw out an earlier $20 million settlement agreement, between the SEC and Bank America. With, Radkiff saying that the settlement was slap on the hand and would have forced investors to pay for managements mistakes. Now, with increased amounts of scrutiny, it appears as if the SEC could have a second settlement thrown out.

This is significant; because it could increase pressure on the agency as to how and when such settlements occur. Meaning, that the SEC will more than likely put added pressures on financial institutions; to disclose more information to shareholders and follow the various regulations. Otherwise, there could be civil law suits brought forth that will impose severe penalties for such actions. This means, that the way the SEC has worked in past could be changing, as the various financial scandals will more than likely give regulators even greater powers.