Judge says $33 mln settlement leaves issues open. Link to bailout money unclear, judge says. Bank of America, SEC not available for comment.
NEW YORK, Aug 5 (Reuters) - A U.S. federal judge has refused to approve Monday's settlement between the U.S. Securities and Exchange Commission and Bank of America Corp (BAC.N) related to the acquisition of Merrill Lynch & Co.
In an order on Wednesday, Judge Jed Rakoff of the federal district court in Manhattan said it may be unfair to the public to accept the settlement, which would resolve SEC allegations that Bank of America made false and misleading statements to shareholders about bonuses promised to Merrill employees.
Bank of America had agreed to pay $33 million to settle the civil lawsuit and, along with the SEC, had sought the judge's approval for the settlement. Rakoff set a hearing on the matter for the afternoon of Aug. 10.
In its complaint, the SEC had alleged that Bank of America told investors in proxy documents for the Merrill merger that Merrill had agreed it would not award year-end performance bonuses or incentive pay before the merger closed.
In fact, the SEC alleged that Bank of America had already authorised Merrill to pay up to $5.8 billion in bonuses. Merrill would ultimately pay $3.6 billion, according to regulators.