BofA Seeks Settlement

Bank of America is quietly talking with New York Attorney General Andrew Cuomo about settling the N.Y. case against the bank over its purchase of Merrill Lynch.

The New York Times, citing people familiar with the matter, said no settlement has been reached, but talks are continuing, and Bank of America's new CEO, Brian Moynihan, is interested in putting the matter behind the bank.

In a separate development, Federal Judge Jed Rakoff has rejected a Securities and Exchange Commission

The Charlotte Business Journal reported the SEC wanted to charge Bank of America Corp. with failing to disclose extraordinary financial losses at Merrill Lynch & Co. before BofA shareholders voted to approve the deal.

The SEC had asked the U.S. District Court for the Southern District of New York for permission to amend its pending complaint against BofA to include the new charges.

The agency previously charged the bank with misleading investors about billions of dollars in bonuses that were paid to Merrill executives. That complaint was amended in October to add a charge of failure to comply with certain disclosure obligations under federal proxy rules.

The commission’s latest complaint alleges Charlotte-based BofA learned before its December 5, 2008, shareholder vote that Merrill lost $4.5 billion in October, and that the bank estimated that Merrill had experienced billions of dollars in additional losses in November.

According to the SEC, the actual and estimated losses together represented approximately one-third of the value of the merger at the time of the shareholder meeting and more than 60 percent of the aggregate losses Merrill Lynch sustained in the preceding three quarters combined.

BofA bought Merrill Lynch on January 1, 2009, for $29.1 billion.