SEC to review if BofA broke the law: report

The U.S. Securities and Exchange Commission is reviewing if Bank of America Corp violated federal securities law by failing to disclose to shareholders Merrill Lynch's plan to pay $3.62 billion in bonuses before they voted for the merger of the banks, the Financial Times said.

Mary Schapiro, chairman of the SEC, wrote in a letter to a Democratic congressman that the regulator was "carefully reviewing the Bank of America disclosure" and had not yet expressed a view on whether the bonus plan should have been revealed, the paper said.

Last week, Congressman Dennis Kucinich said in a letter to the SEC that there were "significant questions" surrounding Bank of America's failure to disclose bonus details before shareholders voted on the bank's acquisition of Merrill.

"Where the SEC believes that there has been an omission of material facts necessary in order to make the statements not misleading, we will carry out our enforcement responsibilities with vigor and vigilance," the paper quoted Schapiro's letter.

The SEC did not immediately reply to a Reuters e-mail seeking comment that was sent outside of normal business hours.

In a statement last week, Bank of America had said "we believe we made the appropriate and legal disclosures in the materials available to shareholders" before the meeting.

[Source: Reuters, NY, 14Apr09]

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