The regulatory waiver given to the largest bank of the U.S., Bank of America Corp (NYSE:BAC), has been praised by another Securities and Exchange Commission member who called it a “breakthrough” in commission’s methods to handle waivers. Earlier last month, SEC announced short-term regulatory waiver for the bank allowing it to sell shares in its hedge funds.
Kara Stein, Security and Exchange Commission Democratic Member, was all praise for the waiver under which Bank of America Corp (NYSE:BAC) could sell more shares under private deals by hiring an independent compliance expert to monitor the overall process. She added,
“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.”
The waiver offered last month allows Bank of America to sell shares under hedge funds, startups and similar private offerings for its institutional and wealthy customers. At the time of granting of the waiver, Stein along with another Democratic commissioner, Luis Aguilar, were against the waiver citing extra leniency from the commission for Wall Street Firms. However, Daniel Gallagher and Michael Piwowar, Republican Commissioners of SEC, backed these waivers.
Mr. Gallagher later said that it is important to process waivers “dispassionately” and added,
“If we are going to deny waivers as a way of inflicting additional punishment for past wrongdoing, essentially treating disqualifications as enforcement remedies, then I will have to re-evaluate whether I can vote on an overall enforcement case without considering waiver issues at the same time.”
This is a relief for Bank of America Corp (NYSE:BAC), which paid settlements amounting to $16.65 billion this summer and the settlement triggered multiple “bad actor” rules against the bank disqualifying it from certain investment practices.
Prior to this statement from Stein, both Stein and Aguilar have opposed full-blown waivers given to the financial institutions breaking laws citing zero incentives for restricting bad investing practices.
This article has been written by Prakash Pandey.