Bank of America could face jury trial over Merrill Lynch bonuses

8 October 2009

Bank of America may face a jury trial over claims it misled investors about billions of dollars of bonuses paid to Merrill Lynch executives.

The Securities and Exchange Commission (SEC) made a plea to the US District Court for the case to be heard by a jury after Judge Jed Rakoff rejected a $33 million settlement deal between Bank of America and the SEC last month.

Merrill Lynch paid out $3.6 billion in bonuses in 2008 despite making a $27.6 billion loss during that year.

It is alleged by the SEC that Bank of America had told Merrill Lynch executives that they could pay almost $6 billion in bonuses, despite telling investors in November 2008 that Merrill had agreed not to pay out end of year bonuses.

Bank of America spokesman Lawrence Di Rita said: "We remain confident that we disclosed everything that we were required to and are preparing for the opportunity to present the facts before the court and the jury."

Last week, Bank of America chief executive officer Kenneth Lewis, who presided over the Merrill Lynch deal, took early retirement.

By Claire Archer

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