Citigroup, BofA: See No Evil

Citigroup and Bank of America investors are an easygoing bunch all of a sudden.
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NEW YORK (

TheStreet

) --

Citigroup

(C) - Get Report

and

Bank of America

(BAC) - Get Report

appear to be getting up on the right side of the bed of late.

For a second straight day,

The Wall Street Journal

published a report suggesting the banks were less than straightforward in their disclosures about short-term borrowing, and for the second straight day, investors shrugged off the news, causing the stocks to open higher. As happened with the rest of the market, the banks couldn't hold the gains Wednesday but were more successful in doing so on Thursday.

In addition to benefitting from overall market bullishness, the banks were helped on both days from positive pre-market news. On Wednesday

, Citigroup

got an upgrade from Oppenheimer and a boost from a report in the

Financial Times

saying the Qatar Investment Authority was interested in buying Citigroup shares from the Treasury.

Thursday morning, Citigroup was buoyed by star hedge fund manager Bill Ackman, who disclosed at a conference that he had bought 150 million shares of the common stock. Not to be outdone, Bank of America got a boost from another hedge fund bigshot, David Tepper, who argued at the same conference that the shares are worth $27, well above their $15.47 close when he made the statement on Wednesday. The shares closed Thursday at $16.18, up 4.59%. Citigroup closed at $4.02 Thursday, up 4.15%.

The action in both stocks shows timing is everything when it comes to disclosures. Companies know this, which is why they so often like to disclose bad news in

Securities and Exchange Commission

filings on Friday afternoons.

Though the markets were oblivious, Thursday's report was a bit more troubling than Wednesday's. While the report on Wednesday said the banks were shifting debt around at the end of each quarter to make the banks' balance sheets look less risky, the moves appeared to be in compliance with existing accounting rules. Thursday's report stated that the banks "incorrectly hid from their investors billions of dollars of their debt."

The banks acknowledged misclassifying the debt, but said it was due to errors. However, they could be in trouble if the SEC decides to open an investigation and concludes the misclassification was intentional.

The Journal

said it had no evidence the misclassification was intentional or that the SEC was investigating.

If things change and the SEC decides to investigate and ultimately punish the banks, investors may not be so forgiving. The SEC demonstrated when it unveiled civil fraud charges against

Goldman Sachs

(GS) - Get Report

that it likes to make an impact. Tired of being criticized for inaction, the SEC is eager to prove it is walking the beat these days. In other words, don't look for any Friday afternoon announcements.

More on Citi Jim Cramer: Thoughts on Citi

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Written by Dan Freed in New York

.