Bank of America faces more bonus embarrassment

NEW YORK (Reuters) - Bank of America Corp will likely face more embarrassing disclosures about bonuses paid at Merrill Lynch & Co after a federal judge refused to rubber-stamp a settlement over the $3.6 billion of payouts.

Judge Jed Rakoff's criticism of the $33 million settlement with the U.S. Securities and Exchange Commission prolongs the drama over bonuses that have prompted outrage in Congress and a probe by New York Attorney General Andrew Cuomo.

It also means Kenneth Lewis, Bank of America's embattled chief executive, may face more scrutiny over perhaps the most controversial aspect of the shotgun merger.

"What the judge is trying to get at is, was there actual fraud here?" said Cornelius Hurley, director of the Morin Center for Banking and Financial Law at Boston University. "The risks are they go back to their corners, and the SEC really does attempt to prove wrongdoing."

At a hearing in Manhattan, Rakoff said the fine appeared "strangely askew," representing only a "tiny, tiny fraction" of the bonuses, and might be unreasonable if the SEC were correct that the bank "essentially lied" about the bonuses.

Despite losing $27.61 billion in 2008, Merrill paid out 696 bonuses of $1 million or more, Cuomo said in a report in July.

GIVING UP THE GHOST

Rakoff questioned whether taxpayers footed the bill for the bonuses with some of Bank of America's $45 billion of bailout money, and whether it was fair for Merrill to pay bonuses, other than those required by contract, averaging $91,000 per person.

He also appeared dismayed by arguments that lawyers for Bank of America and Merrill somehow kept upper management out of the loop on many details of the bonuses.

"Was this some sort of ghost who performed these actions, or were they human beings?" Rakoff asked SEC lawyer David Rosenfeld at the hearing. Rosenfeld said the regulator chose in agreeing to settle not to allege wrongdoing by individuals.

Greater disclosure of who knew what could add ammunition to lawsuits against Bank of America as well as critics of Lewis.

Shares of Bank of America have fallen by roughly half since the announcement of the Merrill purchase after less than 48 hours of talks last September 15, at the height of the financial crisis.

Much of the anger concerns when Bank of America knew Merrill's fourth-quarter losses were soaring, why it did not disclose them sooner, and why it did not back out of the merger. Lewis has said regulators pressed him to complete the merger.

More disclosure might also shed light on the SEC's actions, at a time the Obama administration is mulling historic changes to federal oversight of financial companies.

JUDGE HAS LIMITED POWERS

"BofA is already being forced to make radical changes in how it operates, but I see less of a risk to BofA than I do potentially to government officials," said Jill Fisch, a professor at the University of Pennsylvania Law School and co-director of its Institute for Law and Economics.

"One of the things the settlement covers up is the government role, including that of the Federal Reserve," she added. "More disclosure of what went on could provide a check on overreaching by any one regulator."

Fisch said Rakoff cannot force the SEC to impose a higher penalty, but has the authority to insist on greater disclosure because of the public interest.

Richard Bove, an analyst at Rochdale Securities who views the merger as a positive for Bank of America, said prolonging the legal battle actually hurts shareholders.

"It is the stockholders who pay the fines," he wrote.

Rakoff ordered Bank of America and the SEC to submit new papers by August 24, and said he might hold another hearing.

"The judge seems to have the feeling the SEC pulled a punch, and that's why he wants to get down to the facts of who knew what, and when," Hurley said. "This comes as the SEC tries to recover some of its damaged reputation in the enforcement area. They're not getting a gold star for this one."

The case is SEC v. Bank of America Corp, U.S. District Court, Southern District of New York (Manhattan), No. 09-6829.

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The FBI recently sent more than a dozen armed agents to the home of well-known pro-life activist Mark Houck to arrest him for allegedly violating the Freedom of Access to Clinic Entrances or FACE Act. Now the father of seven faces up to 11 years in prison over claims that he blocked a man from entering an abortion clinic and shoved him when he wouldn't stop verbally harassing Mark's 12-year-old son. Now, if that doesn't sound insane enough, this all happened after local authorities dropped the case. So, what's the full story here?

Attorney Peter Breen joined Glenn Beck on the radio program Tuesday to tell the family's side of the story, including how the case was already "won" three years ago, and how, after receiving a target letter from the United States Attorney's Office for the Eastern District of Pennsylvania, Mark's legal team agreed to cooperate fully, only to hear nothing back until the day the FBI showed up on Mark's doorstep.

Breen also explained how the FBI has tried to downplay "abuse of power" claims, accusing Mark's wife of making "inaccurate claims" about the terrifying experience.

"Ryan-Marie, who is Mark's wife, she thought she saw 25 [FBI agents.] The FBI came back and said it wasn't 25, it was no more than 15 or 20 heavily armed federal agents. And she had called them a 'SWAT team' because she's a lay person. I don't know the difference between a SWAT team and a bunch of heavily armed, armored, and shield-bearing federal agents," Breen said.

According to Fox News, a senior FBI source said:

There may have been 15-20 agents at the scene, but denied 25 were there. The agents who came to the door had guns out and at the ready, according to this FBI source, but the guns were never pointed at Houck or his family and were lowered or holstered as soon as Houck was taken into custody. Houck was handcuffed with a belly chain.

"So, yeah, they had guns drawn and pointed at Mark in front of his wife and their children. And that whole show of force was done against a man who was not a drug lord, not a mafia boss, but instead, a law-abiding pillar of the community whose attorney said, 'we'll bring him in if you decide to charge, even though you have no case.'"

Breen went on to assert that he believes Congress "needs to" hold Attorney General Merrick Garland accountable for the arrest. "I can't imagine that those 20 federal agents were excited about being called out to a peaceful man's home, guns drawn," he said.

In the video clip below, Breen goes on the explain what he believes should happen next, and why Houck's arrest "should frighten all of us." Can't watch? Download the podcast here.

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Gavin McInnes broke the internet last month when his live show was interrupted, and it appeared that he was arrested. He broke the internet again a few weeks later when he admitted that the arrest was staged as part of what was intended to be an elaborate prank.

McInnes joined Glenn Beck on "Glenn TV" to explain the real reason behind his disastrous prank.

"This was a $10,000 joke. I lost 100 subscribers because of it, but I was going away to Paris for a week because my daughter is going to college and I thought let's make it interesting," McInnes said of his decision to fake an on-air arrest in the middle of his live "Get Off My Lawn" podcast on August 25.

"There was a method to the madness, with the prank ... my point was, first of all, this is happening to people in real-time. Tim Poole has been swatted a million times," he explained to Glenn. "The thought police are in full effect. I also wanted to lampoon the media's bloodlust for us suffering."

Glenn played a clip of the now-infamous hoax while McInnes explained what was really going on behind the scenes, including how his very drunk friend "Unrelia-Bill" was supposed to act the part of the arresting officer but ended up being much too intoxicated (at "2 pm") to speak even a few lines, and how smugly gleeful the "far left" was when they thought McInnes had actually been arrested.

Watch the video clip below to catch more of the conversation:


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Glenn Beck joined Fox News' Tucker Carlson on Thursday night to discuss Visa Inc.'s "horrifying" new plans to flag firearm sales by separately categorizing purchases at gun shops, a move that Glenn aptly described as "the next step in banning guns."

In what's been hailed as a major victory for gun control activists, Visa agreed to adopt the International Organization for Standardization's (ISO) new set of standards by creating a special merchant category code for gun and ammunition sales.

In his appearance on "Tucker Carlson Tonight," Glenn shared a letter written by Robert B. Thomson III, a senior vice president at Visa, showing that the credit card company initially pushed back on the ISO's new rules.

“We believe that asking payment networks to serve as a moral authority by deciding which legal goods can or cannot be purchased sets a dangerous precedent,” Thomson wrote in the letter to pro-gun-control lawmakers, including Democratic Sen. Elizabeth Warren of Massachusetts.

Just days later, however, Visa had agreed to comply with the ISO's plan to establish a new merchant category code for gun stores. So why did Visa suddenly flip?

As Glenn explained, it all comes down to pressure from America's largest union-owned bank, the Amalgamated Bank, one of the only unionized banks in the United States and a proud proponent of ESG (Environmental, Social, and Governance) investing.

"This is the next step in banning guns," Glenn asserted.

"It's horrifying!" Tucker responded after several seconds of stunned silence.

"I'm so grateful you did the reporting on this," he told Glenn. "I'm not sure why it falls to you since we have a couple of very large daily newspapers in this country you'd think would want to report this, yet none of them did. So, Glenn Beck did."


On a recent episode of "The Glenn Beck Program," Glenn broke down the details of this latest attack on the Second Amendment and revealed how this is a step toward something even worse than federal gun registration. Watch the video clip below for more details. Can't watch? Download the podcast here.


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Glenn Beck: Here's why Stacey Abrams' fetal heartbeat remarks are hilarious but TERRIFYING

(Left) Image source: video screenshot/ (right) Photo by Marcus Ingram/Getty Images

Georgia Democratic gubernatorial candidate Stacey Abrams has a new pro-abortion conspiracy theory: "There is no such thing as a [fetal] heartbeat at six weeks ... it is a manufactured sound designed to convince people that men have a right to take control of a woman’s body."

On the radio program Thursday, Glenn Beck and producer Stu Burguiere agreed Abrams' latest "misinformation" is not just ridiculous but could be dangerous if people are actually willing to believe her.

"If you want to defend abortion, go ahead and defend it. Defend what you're actually doing. Stop denying what is reality," Stu said. "If this is such a great defensible policy, then just come out and defend it, but they never can ... you notice how they can't go to the actual thing they say is so important. They keep defending these other things that aren't true."

Glenn said the pro-choice movement was successful for a long time because most people want the decision to be up to the woman and her doctor and that abortion should be safe, legal, and rare. But when leftists began "celebrating" their abortions or calling for "abortion on demand" at any point in the pregnancy, that's when they start to lose support.

"Because they've celebrated abortion and are losing regular people, you can't put that genie back in the bottle. So, what do they have to do now? They have to take the insane step of discrediting medical machines and technology," Glenn said.

"This is after two years, by the way, of them claiming the biggest scandal in the world was people suggesting the voting machines were hacked — after they previously said that voting machines were hacked in elections they [Democrats] lost," Stu pointed out.

"Honestly, gang, think this through because this is where life gets very scary. This is where you go to authoritarian rule and you can kill millions of people because you're truly now discrediting things that everyone knows is true," Glenn warned.

"So, if you disagree ... you can say that is an evil magic box that has made up sounds in it to convince people. If they will buy that, you're at the Salem witch trials. 'If she doesn't float, she wasn't a witch.' That's what you're looking at right now — and what's frightening is, [Abrams] can say this with a straight face and no one discredits her," he continued.

"You don't think that they can convince those people that you are a terrorist because of the way you vote? [...] You don't think they can convince half the country that you should be eliminated, liquidated, put into a camp, whatever authoritarians love to do? ... We are headed towards dangerous, dangerous times. We better wake up and stand together because this is frightening — it's hilarious — but because people are taking it seriously, it is terrifying," Glenn added.

Watch the video clip below to hear more from Glenn. Can't watch? Download the podcast here.

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