Judge Jed S. Rakoff just overturned the settlement between Bank of America and the SEC, in which BofA agreed to pay a fine of $33 million. The fine was penance for not revealing to stockholders of either BofA or Merrill Lynch that Merrill had paid out $3.6 billion (yes, with a “b”) in employee bonuses immediately prior to their acquisition by BofA.
Judge Rakoff concluded that BofA “materially lied” to shareholders – in other words, BofA’s pants were literally on fire.
He went on to add that the $33 million settlement “does not comport with the most elementary notions of justice and morality.” Oh snap, your honor…
He was also not especially thrilled by the fact that the burden of paying the fine was being borne by BofA’s shareholders – the very people injured by the failure to disclose the bonus scheme, writing:
It is quite something else for the very management that is accused of having lied to its shareholders to determine how much of those victims’ money should be used to make the case against the management go away.
As if all of this wasn’t enough to make me swoon with delight, Judge Rakoff also quoted from Lady Windermere’s Fan by Oscar Wilde (I know!), in which a cynic is defined as someone “who knows the price of everything and the value of nothing.”
Can we please get this guy onto the Supreme Court – stat?