October 13, 2009
BofA Reverses Course: Waives Attorney-Client Privilege
– Broc Romanek, CompensationStandards.com
It is widely reported that Bank of America’s board decided on Friday to reverse course and waive its attorney-client privilege so that the SEC, Andrew Cuomo and others will soon know the details regarding “who advised what” when it came to BofA deciding not to disclose the circumstances regarding bonuses paid to Merrill Lynch employees. According to this NY Times article:
The board reached a tipping point after bank executives held conversations over the last two weeks with the office of New York’s attorney general, said the people briefed on the matter. Mr. Cuomo’s office threatened to charge individual bank executives, including Mr. Lewis, with wrongdoing, these people said. The bank also faced a deadline this week to provide a log of its private legal documents to a House committee.
The bank notified Mr. Cuomo’s office of its decision on Monday, and will do the same in a separate case pending against it by the Securities and Exchange Commission. The bank will also provide documents to investigators in Congress, Ohio and North Carolina, where the bank is headquartered.
SEC (and BofA) Requests a Jury Trial: Is That Normal?
Last week, both the SEC and Bank of America filed a notice in the US District Court-SDNY seeking a jury trial. I searched the SEC website and confirmed my hunch that it is not at all uncommon for the SEC to ask for a jury trial, particularly when the circumstances indicate that their action will be contested. There looked to be at least a dozen complaints filed already in 2009 with demands for jury trials.
Bear in mind that most cases are filed as settled cases, so there would never by a jury trial demand in any of those. For example, in this case, the SEC didn’t initially file a demand for a jury trial because BofA settled (and then Judge Rakoff didn’t accept the settlement).
Ohio Attorney General Files Class Action Lawsuit against Bank of America
It’s not just New York Attorney General Andrew Cuomo and the SEC going after BofA (and a horde of private plaintiffs; this Bloomberg article notes Delaware VC Strine refused to dismiss a case against BofA yesterday). On September 28th, the Washington Post article noted the Ohio Attorney General has filed a class action lawsuit against Bank of America and its executives over the bank’s alleged failure to disclose losses and bonuses prior to its acquisition of Merrill Lynch.