Bank of America has entered into a proposed settlement with the Securities and Exchange Commission (SEC) to resolve all cases filed by the SEC related to the Merrill Lynch merger. The proposed settlement will be submitted for approval to the US District Court for the Southern District of New York.
Bank of America has also entered into an agreement with the Office of the Attorney General for the State of North Carolina (NC AG) to resolve all matters that are the subject of an investigation by the NC AG related to the Merrill Lynch merger.
Under the terms of the settlements, Bank of America agreed to pay $150m as a civil penalty to be distributed to shareholders as part of the SEC’s Fair Fund program at a later date in accordance with further order of the court. A payment of $1m will also be made to the NC AG for its consumer protection purposes. The payment to the NC AG is not a penalty or a fine.
In addition, as part of the settlements, Bank of America agreed to: Engage an independent auditor to perform an assessment and provide an attestation report on the effectiveness of the company’s disclosure controls and procedures; Furnish management certifications signed by the CEO and CFO with respect to proxy statements; and Retain disclosure counsel to the audit committee of the company’s board of directors.
Bank of America has also agreed to: Adopt independence requirements beyond those already applicable for all members of the compensation committee of the company’s board of directors; Continue to retain an independent compensation consultant to the compensation committee; Implement and disclose written incentive compensation principles on the company’s Web site and provide the company’s shareholders with an advisory vote concerning any proposed changes to such principles; and Provide the company’s shareholders with an annual “say on pay” advisory vote regarding the compensation of executives.