This is the case involving allegations that Bank of America's board withheld information from shareholders that may have been relevant in their consideration of whether to approve the Merrill Lynch acquisition.
Rakoff suspects that both sides were using the proposed settlement to bury the story, and he's not having it. Here's Zachary Kouwe's summary in today's NYT:
He accused the S.E.C. of failing in its role as Wall Street’s top cop by going too easy on one of the biggest banks it regulates. And he accused executives of the Bank of America of failing to take responsibility for actions that blindsided its shareholders and the taxpayers who bailed out the bank at the height of the crisis ...
The judge accused Bank of America and the S.E.C. of concocting the settlement to effectively absolve themselves of further responsibility. “The S.E.C. gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger,” he wrote, and “the Bank’s management gets to claim that they have been coerced into an onerous settlement by overzealous regulators.”
---------Rakoff's ruling is somewhat amazing to me. It means that the S.E.C. could be compelled to proceed with a trial (beginning next February 1) that it wants to settle. Rakoff is determined to expose whether B. of A. lied to its shareholders, rather than just permitting a bland admission of wrongdoing. Wow - a man on a mission to get to the bottom of things (echoes of Patrick Fitzgerald).
---------The current chair of the S.E.C. is Mary Schapiro. My earlier post about B. of A. and Merrill is here.