The SEC Commissioners are struggling over whether a big money center bank can be “too big to be a bad actor.”
Bloomberg reports that the Democratic-appointed Commissioners are arguing that Bank of America should not get a “bad boy” waiver as a part of its negotiated toxic mortgage settlement. Without the waiver, BOA could not offer private placements to its clients. Commissioner Stein has said in the past that banks need to know that there are consequences to bad behavior.
Proponents of the waivers say that it is a blunt instrument meant for egregious frauds perpetrated by small time operators, not established financial institutions where it would penalize innocent customers.
Bloomberg surmises that with the Chairman recusing herself, it’s possible that BOA may not get all of the waivers it seeks.