Corporate Governance

BofA, the SEC, and the Merrill Lynch Bonuses: The Costs of Legal Representation

By J. Robert Brown

Attached to the BofA memorandum filed yesterday was an affidavit from Morton Pierce, the chairman of the Mergers and Acquisitions Group at Dewey & LeBoeuf LLP.  He was asked "to analyze how compensation disclosures of the type that are the subject of the Complaint are customarily made in transaction documents of this nature."  The affidavit is in fact an interesting exegesis into some of the customary practice that surrounds compensation disclosure.

We found more intriguing, in a tough economy, the statement of Mr. Pierce's billing rate.  As he notes:  "I am being compensated at my normal hourly rate of $1,090 per hour for my time on this matter."  As for additional work done by the firm, the affidavit notes:  "From time to time, Dewey & LeBoeuf and its predecessor firms have provided legal services to Bank of America Corp. ("Bank of America") and Merrill
Lynch & Co. ("Merrill Lynch"). During the period from January 1, 2007 through the present, we have billed Bank of America $7,706,153.03 and Merrill Lynch $3,862,390.68."

In short, the $33 million paid as a penalty to the SEC (assuming approval of the settlement) is likely to be a fraction of the total cost associated with this matter.

Full post as published by The Race to the Bottom on August 25, 2009 (boomark / email).