Bank of America to Face SEC Charges

CHARLOTTE, N.C. (TheStreet) -- A Securities and Exchange Commission official said Friday that the agency plans to pursue charges against Bank of America (BAC), and possibly some of its executives, over its handling of the Merrill Lynch acquisition.

Enforcement Director Robert Khuzami told the House Committee on Oversight and Government Reform that the SEC will "vigorously pursue our charges against Bank of America and take all necessary steps in an effort to prove our case in court."

The agency had initially sought a $33 million settlement with Bank of America, in which the bank admitted no wrongdoing. In an unusual move, a New York judge skeptically questioned the fairness of that punishment vs. the alleged misconduct, and prevented the settlement from going through.

Khuzami the SEC had done what it could, based on the facts of the case and earlier precedent. It now plans to use new information and further investigate in an effort to bring charges against Bank of America, and possibly some top executives. Whether the SEC will be successful in those efforts is unclear.

Federal Deposit Insurance Corp. Chairwoman Sheila Bair also testified on Friday before the committee in its fifth and last hearing about the BofA-Merrill deal.

Bank of America has been locked in a battle with regulators and lawmakers over Merrill's 2008 bonus payments amid escalating losses. The bank did not disclose the information as soon as it was known. It also kept from telling investors that then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke had pressured Bank of America CEO Ken Lewis to close the deal, despite his doubts.