The Securities Exchange Commission decided that Bank of America is going to have to pay $33 million for failing to alert shareholders about bonus payments made to Merrill Lynch.

The SEC filed charges against BofA this morning for misleading its’ investors about paying billions of dollars in bonuses to top executives at Merrill Lynch, the brokerage giant they just purchased.

“Regulators alleged that the Charlotte, N.C.-based lender failed to disclose plans to give out $5.8 billion in bonuses for fiscal year 2008 in its proxy statement. Instead, Bank of America told shareholders that Merrill had agreed not to pay year-end performance bonuses, according to the SEC.”

“‘Failing to disclose that a struggling company will pay out billions of dollars in performance bonuses obviously violates that duty and warrants the significant financial penalty imposed by today’s settlement,’ Robert Khuzami, Director of the SEC’s division of enforcement, said in a statement.”

BofA agreed to settle without admitting to the charges.

Check out the original article: BofA to pay $33M fine over Merrill bonuses

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The U.S. Securities and Exchange Commission is in high demand. Having repeated last year’s total of distributing more than $1 billion to investors who fell victim to fraudulent actions, they also brought 671 enforcement actions in 2008.

“The SEC’s role in policing the markets and protecting investors has never been more critical,” Linda Chatman Thomsen said.

There has been a spike of up to 25% in insider trading cases and more than 45% in market manipulation cases. Major fraud cases included a suit against a Wall Street short seller for “spreading false rumors about a company and profiting from the stock price’s subsequent drop.”

Another mentionable suit was against two former Bear Stearns hedge fund managers for misleading investors about two of the company’s hedge funds. And on the rise are Foreign Corrupt Practices Act (FCPA) cases that involve U.S. public company bribery of foreign officials.

Good to know! Hopefully the current economy slip will push for stricter laws, better protection and more preventative steps geared towards stopping another “financial” outbreak.”

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In the United States, shares must be registered before sold to the public. It is impossible to register shares without the Company preparing a registration statement and filing said statement with the Securities Exchange Commission. Registration Rights are not granted by statute, but rather, Registration Rights are granted per an Agreement between a company and investors. This article will address the key provisions that must be included in a Registration Rights Agreement.

The agreement should address which investors will receive registration rights. Controlling shareholders rarely require registration rights since they can force a company to register their shares at any time. Sometimes registration rights are granted to all outside investors equally. If distinctions are drawn, which groups receive rights are usually determined by the price the investor pays for its shares and the number of shares it purchased.

The agreement should address when the registration rights will become effective and when the company may refuse to honor the rights. Many registration rights agreements allow the company to decline to honor a registration request if the disclosure of a pending corporate transaction in connection with the registration would negatively impact the company.

As far as cutbacks, most registration rights agreements provide that the shares to be registered will be sold to the public in a firmly underwritten offering. Under US securities laws, the company has strict liability for any material misstatements or omissions in a registration statement. Selling shareholders also have some liability for misstatements or omissions. Many issues arising under registration rights agreements are the subject of negotiation, taking into account the investment climate at the time and the economic leverage of the investors.

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In the United States, shares must be registered with the SEC before they can be sold to the public. In turn, it is impossible to register shares without the company preparing a registration statement and, along with a prospectus, filing said statement with the Securities Exchange Commission. The right to register one’s shares is not granted by federal or state statute, but rather, by mutual agreement between a company and investors. This article will address the key provisions that must be included in a Registration Rights Agreement.

The agreement should first address which investor or investors will receive the right to register their shares. Controlling shareholders rarely require registration rights since they can force a company to register their shares at any time. Sometimes registration rights are granted to all outside, minority investors at the same time. Other times distinctions may be drawn among groups of minority investors. If distinctions are drawn, which groups receive rights is usually determined by the price the investor pays for its shares and the number of shares it purchased. The higher the purchase price the greater the chance to receive the right to register. Likewise, the more shares one owns, the greater the chance.

The agreement should also address when the registration rights will become effective. Registration rights usually become effective immediately following the expiration of any freeze on selling a company’s stock, which is usually six months following the IPO of the company’s shares in the United States. On a related issue, the company will often require that a certain minimum threshold of registrable securities be registered in connection with any single registration request, so that the company is not required to go through the time and expense of a registration, which can be considerable, unless a substantial number of shares are involved. This threshold is often expressed in terms of a percentage of all outstanding registrable securities or an aggregate dollar amount based on the market price of the shares.

The agreement should address when the company may refuse to honor the rights. Many registration rights agreements allow the company to decline to honor a registration request if the disclosure of a pending corporate transaction in connection with the registration would negatively impact the company. For example, if the company is in secret negotiations to sell a major business, these negotiations might potentially need to be disclosed in the registration statement.

Finally, the issue of indemnification should be addressed in the agreement. Under U.S. securities laws, the company has strict liability for any material misstatements or omissions in a registration statement. Selling shareholders also have some liability for misstatements or omissions. Accordingly, selling shareholders typically request that the registration rights agreement contain an indemnification from the company to each selling shareholder for any liability arising from such material misstatements or omissions, other than with respect to information provided by the shareholder in writing for inclusion in the registration statement.
Many issues arising under registration rights agreements are the subject of negotiation, taking into account the investment climate at the time and the economic leverage of the investors. Investors should utilize the services of an experiences securities lawyer to draft or review the agreement and ensure their rights are being protected.

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Companies like Exxon Mobile have an enormous amount of subsidiaries, and they seem to acquire or grow new ones at a rapid pace. Documents like this one are required by SEC, which provide a detailed list of the subsidiaries of a given organization. It’s fairly obvious that Mobil Corporation is a subsidiary, but it would be far less obvious that Tonen Kagaku K.K. (based in Japan) is also under the umbrella of Exxon Mobil.

To view the full list, click here

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