Legal News

Rakoff to BofA: I?m Not Quite Done With You . . . Or Wachtell

By Ashby Jones

The SEC and BofA must have been expecting this. They must have figured that Jed Rakoff, the federal judge who is weighing whether to approve a proposed $150 million settlement between the parties over allegations the bank misled investors about its merger with Merrill Lynch & Co., wouldn’t just sign off on whatever the parties sent his way. It just didn’t seem Rakoff’s way, after excoriating the parties when they sent their first settlement his way.

Who knows — Rakoff might ultimately sign off on the new deal. But if he does, sure enough, it won’t be before he puts the parties through their paces.

He made this clear on Thursday evening, when, in an order, he requested voluminous information from both parties. Click here for Amir Efrati’s story in the WSJ; here for previous LB coverage of the BacMerSaga.

In a written order, the judge asked for material related to the termination in December 2008 of the bank’s then-general counsel, Timothy Mayopolous, and the “extent of participation” after November of that year by the bank’s attorneys at Wachtell Lipton in evaluating the disclosure issues raised by reports of increased losses at Merrill Lynch prior to the merger approval date.

The judge also asked for information about anyone affiliated with the bank or its lawyers who recommended a pre-merger disclosure to the bank’s shareholders about Merrill’s post-September losses. He also wants to see material regarding anyone affiliated with the bank who recommended a pre-merger disclosure regarding decisions that had been reached by the bank to allow Merrill to distribute billions of dollars in year-end bonuses.

The judge gave the parties until Feb. 16 to submit the material, which includes deposition testimony, documents and emails.

Full post as published by Law Blog - WSJ.com on February 12, 2010 (boomark / email).