| 03 August 2009

The Securities and Exchange Commission today charged Bank of America (BAC) with failing to disclose upwards of $5.8 billion in bonuses it was contractually obligated to pay Merrill Lynch employees for 2008. Bank of America told shareholders that it would not pay bonuses prior to the closing of the merger without notice or consent.

Those statments, and the subsequent bonus payouts, have come under fire in light of the fact that Bank of America received $55 billion in TARP payments from taxpayers. With this charge the SEC deemed the statements made by Bank of America as materially false an misleading.

"Companies must give shareholders all material information about corporate transactions they are asked to approve," said Robert Khuzami, Director of the SEC's Division of Enforcement. "Failing to disclose that a struggling company will pay out billions of dollars in performance bonuses obviously violates that duty and warrants the significant financial penalty imposed by today's settlement."

Bank of America has agreed to settle the matter with the SEC for $33 million.