New York (HedgeCo.Net) – The Bank of America has been allowed a 30 month waiver from new restrictions on selling shares in hedge funds and other private offerings, the WSJ reports.
Zacks reports: According to the SEC laws, any floundering financial firm is barred from selling a private offering for 60 months. Notably, the same restriction was supposed to be imposed on BofA this week after the bank settled its faulty mortgage-backed securities (MBS) sale with the SEC for $136 million.”
Bank of America has been the subject of several lawsuits and investigations regarding both mortgages and financial disclosures dating back to the financial crisis, including a record settlement of $16.65 billion on August 21, 2014.
The Securities and Exchange Commission will waive the ban on the bank selling shares in hedge funds, as long as Bank Of America takes appropriate remedial actions such as tightening internal control and removing employees found guilty.
Reuters says: “The SEC has said that the bank has to provide the consultant access to files, books, records, and personnel as requested for the review. The consultant is required to complete the review and submit a written preliminary report to the Commission within 360 days of the issuance of the order, the SEC said in the filing.”
Bank of America received $20 billion in the federal bailout from the U.S. government through the Troubled Asset Relief Program (TARP) on January 16, 2009, and a guarantee of $118 billion in potential losses at the company. This was in addition to the $25 billion given to them in the Fall 2008 through TARP. The additional payment was part of a deal with the U.S. government to preserve Bank of America’s merger with the troubled investment firm Merrill Lynch. Since then, members of the U.S. Congress have expressed considerable concern about how this money has been spent, especially since some of the recipients have been accused of misusing the bailout money.
Alex Akesson
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