SEC is going to court with Bank of America over Bonuses

September 22, 2009 – 10:21 am – No Comment

Bank of America Plaza; Dallas, TX

A lot of public scruitiny has been placed on Bank of America after giving out nearly $6 billion in bonuses to Merrill Lynch executives. Just a week after a trial resulted in a $33 million settlement, in which the bank agreed to pay but admit to no wrongdoing, in the case against BofA, the SEC has decided to go to trial against the company to see that it is properly punished for its actions.

Bank of America was supposed to turn over information regarding the merger yesterday, but instead a top executive is meeting with House Representative Edolphus Towns about the acquisition of Merrill Lynch.

The SEC is looking to charge the bank with additional charges if, through the course of the trial, new evidence is discovered or evidence supports any allegations. It could also begin charging individual executives in the trial.

Bank of America was one of the largest takers of TARP money when the government started dealing out the $700 billion in taxpayer funds. So, of course, when money started going to the companies’ executives the American public got angry. I think it’s a good thing that the SEC has decided to step in because it is nice to know that someone is working on the side of the public…even it is for their own public relations image or to try to damage a company that has embarrassed the system.

Yes, I really do think that Bank of America has done a pretty good job of embarrassing itself and the entire financial system by pulling this very “AIG” move. BofA is really damaging its own reputation with customers and potential customers alike. Anyone who may be a potential customer will probably be so disgusted by the company’s business practices that they will likely turn away and not think twice about banking with the company or getting a credit card through them.

Bank of America is also notoriously bad with current customers as well. Just think about all the stores that have been coming out on TV regarding banks charging overdraft fees over and over against customers; most of the time the bank is BofA. Also, it is in the middle of the “interest rate hike” controversy where the company is raising interest rates for credit card holders and charging the higher interest on previously held balances.

They have yet to do this to anyone I know, but I am fairly skeptical about the company because of all the bad press it has been getting. I am more unwilling to work with the company than I was a year ago, even a month ago. Since the news about the executive pay has surfaced, I’m sure the company has lost a lot of its clientele.