This just in: Manhattan federal judge Jed Rakoff has rejected the proposed $33 million settlement between the Bank of America and the SEC. The SEC had alleged that BofA "materially lied" in shareholder communications last year about bonuses to Merrill Lynch employees. Click here for the early WSJ story; here for Rakoff's ruling; here, here, here, here, and here for earlier LB posts.

The SEC and Bank of America had sought the judge's approval of a consent decree to resolve charges that the bank concealed an agreement to pay...