Wachtell and Shearman face SEC action after failed Bank of America settlement

September 16, 2009 Two of the most prominent US law firms are facing scrutiny after U.S. District Judge Jed S. Rakoff rejected the Securities and Exchange Commission's (SEC) proposed government $33 million settlement of a suit alleging that Bank of America didn't adequately disclose that it had authorized billions of dollars in year-end bonuses to Merrill Lynch executives before the bank acquired Merrill this year.

Wachtell, Lipton, Rosen & Katz represented Bank of America in the merger deal, while Shearman & Sterling LLP was acting as a counsel for Merrill.

SEC could bring a civil suit against the lawyers or pursue an administrative action, claiming that attorneys at Wachtell and Shearman violated their professional duty to advise clients to publicly disclose key details of a merger agreement.

Read more at online.wsj.com.

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