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Industry Spotlight > Wirehouse Firms

Ex-Bank of America CFO to Pay $7.5M Fine to New York

By Janet Levaux

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New York Attorney General Eric T. Schneiderman said Friday that former Bank of America (BAC) CFO Joe Price agreed to a $7.5 million fine and to be barred from serving as an officer or director of a public company for 18 months in order to settle the state’s lawsuit against him.

The deal concerns the bank’s actions in 2008 when it began its merger with Merrill Lynch.

According the attorney general’s office, “Despite its top executives’ specific knowledge of mounting losses at Merrill Lynch that were forecast at more than $9 billion, Bank of America failed to disclose that information to shareholders prior to their vote on the proposed merger,” it said in a press release.

Schneiderman also alleged former-BofA CEO Kenneth D. Lewis and Price “misrepresented to shareholders the impact that the merger with Merrill would have on Bank of America’s future earnings.”

A month ago, Lewis agreed to a $10 million settlement with the attorney general, and BofA agreed to a $15 million settlement concerning Lewis’ actions during the merger. He is barred from work on public-company boards for three years.  

“This [Price] settlement is one more step in our effort to hold top financial executives accountable for their actions,” said Schneiderman, in a statement Friday.

“As with our settlement last month with CEO Ken Lewis, today’s action sends a message that conduct harming investors, shareholders, and the public will not go unpunished. I’m pleased to close the final chapter in our litigation over Bank of America’s merger with Merrill, and I will continue to hold individuals — as well as corporations — accountable for their actions,” the attorney general explained.

Bank of America declined to comment on the matter. 

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