When Manhattan federal district court judge Jed Rakoff scuttled Bank of America Corp.’s $33 million settlement with the Securities and Exchange Commission, he didn’t mince words. The settlement, Rakoff fumed, did “not comport with the most elementary notions of justice and morality.” It was nothing but “a contrivance designed to provide the SEC with the facade of enforcement.”
Rakoff also, as he has done throughout the case, raised the possibility that the lawyers could take the fall. He noted that the SEC had said that it could not prosecute individual wrongdoers at Bank of America because “the lawyers for BofA and Merrill Lynch & Co., Inc., drafted the documents at issue and made the relevant decisions.” If that was true, Rakoff asked, “why are the penalties not then sought from the lawyers”
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