Bank of America Documents Leaked

For months, there have been rumors that WikiLeaks possessed the hard drive of a Bank of America executive that would implicate the company in wrongdoing. Now the hacker group Anonymous, which has orchestrated attacks on websites and organizations that it perceived to be biased against WikiLeaks founder Julian Assange, has released the first part of what it claims are a damaging set of emails. According to the Wall Street Journal, it turns out that the emails are between employees of Balboa Insurance, a former BofA division. While some say the emails point to malfeasance in removing records from files, others say that the correspondence pertains only to removing flood insurance documents generated as a result of an error.

Bank of America Prepares for WikiLeaks

When WikiLeaks founder Julian Assange said he had data from a major American bank executive's hard drive, Bank of America downplayed speculation that the information was from BofA or that WikiLeaks could possess damaging information. In a case of closing the barn door after the horse escaped, the New York Times reports that BofA Chief Risk Officer Bruce Thompson and a team of more than a dozen officials have led a largely surreptitious internal investigation into potentially compromised data. Various departments have participated in the investigation, including technology, finance, communications, and legal. The bank has also consulted with external firms to assess potential liability and to help manage the investigation. In addition, it has acted preemptively by securing Web domain names that could be embarrassing to the corporation. Although it is not certain that WikiLeaks' data is from BofA, there has been speculation that it may relate to Securities and Exchange Commission filings about the bank's acquisition of Merrill Lynch and Countrywide Financial.



Bank of America Settles SEC Charges for $137 Million

The New York Times reported that Bank of America reached a settlement with the Securities and Exchange Commission to pay $137 million for its role in allegedly rigging bids in the municipal securities market. Robert Khuzami, director of enforcement at the SEC, said that the Banc of America Securities division paid kickbacks in the municipal reinvestment markets. The company will pay $36 million in disgorgement and interest, $25 million to the Internal Revenue Service, $9 million to the comptroller of the currency, and $67 million to 20 state attorneys general. The agency has indicated that other banks will likely also face enforcement actions.



SEC Tried to Push Proxy Access through Back Door

The Securities and Exchange Commission, led by Chairman Mary Schapiro, is committed to providing shareholders with a more direct way to nominate directors of publicly held companies. In fact, according to Business Week, the agency tried to force “proxy access” upon Bank of America when negotiating the recent $150 settlement over the bank’s acquisition of Merrill Lynch. Although proxy access was ultimately excluded from the proposed settlement, Schapiro had hoped to use it as a test case to prove that the rationale was sound. Currently, shareholders who wish to challenge a company’s board nominees must distribute their own ballots. This process, according to Schapiro, major investors, and pension funds, is cost-prohibitive.

SEC Settles with BofA While New York Attorney General Sues

According to the New York Times, the Securities and Exchange Commission reached a long-awaited settlement with Bank of America over accusations that the financial giant withheld information from shareholders about Merrill Lynch losses when BofA took over the firm. Yet in the wake of the $150 million settlement, which was reached after a federal judge excoriated the SEC for attempting to settle for $33 million, New York Attorney General Andrew Cuomo filed civil fraud charges against former BofA CEO Kenneth Lewis and CFO Joe Price. The case stands out in sharp relief against the SEC’s case, which focused on Bank of America as a corporate entity, rather than the culpability of individual officers.