Bank of America repeatedly insisted it had left Merrill to operate independently before the takeover, as required by law, and had asked Merrill for updates about its sitution after the takeover deal was signed in September. "Companies must give shareholders all material information about corporate transactions they are asked to approve," said Robert Khuzami, director of the SEC's division of enforcement. "Failing to disclose that a struggling company will pay out billions of US dollars in performance bonuses obviously violates that duty and warrants the significant financial penalty imposed by today's settlement." The SEC said that Bank of America's agreement to allow Merrill to pay these discretionary bonuses was in a separate document that was omitted from the proxy statement "and whose contents were never disclosed before the shareholders' vote on the merger." The SEC said the settlement was subject to court approval and that its investigation was ongoing.