SEC's Stein says Bank of America waiver policy is 'breakthrough'

Thu Dec 4, 2014 4:24pm EST
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By Sarah N. Lynch

WASHINGTON (Reuters) - A top U.S. regulator praised the structure of a regulatory waiver granted last month to Bank of America Corp, saying the tougher conditions imposed on the bank may help deter repeat offenses.

Securities and Exchange Commission Democratic member Kara Stein said such conditions as requiring the bank to hire an independent compliance consultant if it wants to keep selling shares in private deals will help "focus and empower" company management to change the corporate culture.

"This approach represents a breakthrough in the commission's method of handling waivers, and I hope to see more of this and other thoughtful approaches in the future," Stein said.

Stein made her comments in a speech on Thursday at the Consumer Federation of America's financial services conference.

Bank of America is the latest bank to get stuck in the middle of a tussle among the SEC's five commissioners over agency policy for when corporate lawbreakers should be granted certain regulatory waivers.

Earlier this summer, the bank reached a record $16.65 billion settlement with the U.S. government over charges it had misled investors who bought troubled mortgage-backed securities that soured during the financial crisis.

The settlement triggered a number of SEC "bad actor" rules that automatically disqualify companies and individuals from participating in certain activities, such as raising private capital or acting as an investment adviser.

The SEC can opt to grant waivers to companies showing good cause why they should not have the privileges revoked.   Continued...

The Bank of America building is shown in Los Angeles, California October 29, 2014.    REUTERS/Mike Blake