Report Will Criticize SEC Over Madoff Failures

The Inspector General of the Securities and Exchange Commission is expected to deliver a stinging report today on the agency’s failure to prevent or detect Bernard Madoff’s $65 billion Ponzi scheme. More>>>

USDJ Rakoff Rejects SEC-BofA Settlement.

Judge Rakoff wants the explanation behind why a Bank of America proxy statement last November misled investors about bonuses for employees at Merrill Lynch, which was about to be acquired by the bank. On Tuesday, he stated another desire: to get the SEC to better explain why had agreed to a settlement without pressing the bank’s executives harder. The judge is also questioning how anyone can judge the merit of a reliance on the advice of counsel defense, when the defendant has not waived the attorney-client privilege.

This is obviously a tough decision for the SEC, and is starting to suggest an apparent willingness on the part of the Commission to let a big player off the hook for serious violations with the payment of a significant sum of money. As we have said in the past, if this wasn't Bank of America, and instead was a small or regional firm, not only would the SEC be looking to put them out of business, prosecutors would be filing criminal charges. More>>>

Lehman Principal Protected Note Arbitrations

Spurred by an enforcement proceeding by the State of New Hampshire and a class action complaint filed against Lehman Brothers executives, retail investors are retaining attorneys to attempt to recover their investment losses in Lehman Brothers. This article from SECLaw.com examines the potential for these cases, and the defense of same.  More>>>

Obama to Nominate Bernanke For Second Term

President Obama on Tuesday will nominate Ben S. Bernanke to a second term as chairman of the Federal Reserve, administration officials said. More>>>

SEC and BofA Try to Convince Judge to Approve Settlement

Bank of America Corp (BAC.N) and the top U.S. securities regulator sought to persuade a judge to approve their $33 million settlement of a civil lawsuit over the lack of disclosure of billions of dollars of bonuses at Merrill Lynch & Co.
The SEC says that BofA misled shareholders by not telling them that it was going to pay Merrill employeees $3.6 billion dollars in bonuses, Bank of America claims that it was clear from the public disclosures that the bonuses would be paid. Both side contend that the settlement, where Bank of America is going to pay $33 million to settle the charges, is a fair settlement.

Judge Rakoff has not yet approved the settlement.
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Madoff Losses May Be Covered Under Homeowner’s Policies

Madoff investors who believe they are without any remedy to recover their losses should look to their homeowner’s insurance to determine if they are covered by the Madoff fraud.

Some homeowner’s policies contain a provision which covers the homeowner from loss of money, securities or properties that results from fraud, typically defined as an intentional act by someone other than the homeowner designed to induce the homeowner to part with something of value.

At least one suit has been brought under such a policy against AIG in California. As investors check their own policies, more suits may follow.

For more information contact us at 212-509-6544 or 973-559-5566.

AIG New CEO's $7 Million Salary

American International Group, the insurer that received billions of dollars in a U.S. bailout, said on Monday that it will pay newly-appointed Chief Executive Robert Benmosche an annual salary of $7 million.

AIG says that the Obama Administration's Pay Czar approved the salary.

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