B of A Faces Two Enforcement Actions
Boraks, David, American Banker
CHARLOTTE -- Analysts say there is little chance of a material effect from Bank of America Corp.'s disclosure that it could face regulatory action on two unrelated matters: a probe of its investment bank and an audit of its pension plans.
The Securities and Exchange Commission staff has "indicated informally" that it is considering recommending an enforcement action because of improper stock trading at Banc of America Securities, the Charlotte company said Tuesday in its annual 10-K filing.
The filing also said that the Internal Revenue Service has "tentatively concluded" that B of A violated tax rules when employees transferred assets from its 401(k) retirement plan to its pension plan in the 1990s. The IRS finding resulted from an audit of the retirement plans' 1998 and 1999 tax returns, the filing said.
It was unclear Wednesday what penalties the $1.1 trillion-asset B of A might face in the two cases.
Jason Goldberg, an analyst at Lehman Brothers, said that both issues are "from the past," and that the practices in question do not appear to be continuing. Even if there are financial penalties, he said, "relative to the size and scale of B of A, I don't think either of these issues will turn out to be material."
B of A disclosed the SEC investigation of trading and research practices at the investment bank's San Francisco office in January 2004. …