During the course of its ‘private’ enforcement talks with the Bank of America Corp (BofA), the Securities and Exchange Commission (SEC) - which is planning to enforce a provision whereby shareholders can nominate directors of publicly-traded US companies - pressed the bank to give shareholders more power to depose directors.

As per the information forwarded by the inside sources in the know, with the $150-million settlement of a Merrill Lynch-takeover-related lawsuit coming through between SEC and BofA, the bigwig lender has convinced SEC to drop the “proxy access” provision.

According to the sources, while the office of the SEC Chairman Mary Schapiro backed the “proxy access” clause; the Charlotte, North Carolina-based BofA opposed it and made counter-proposals.

In the opinion of ex-SEC chief accountant Lynn Turner, despite the fact that most companies want to develop their own systems for giving shareholders power in management appointments, imposing “proxy access” policy on BofA could have helped Schapiro combat opposition; thereby giving the message: ‘If it’s a good thing for BofA, it’s a good thing for everyone else.’

Noting that SEC could use an enforcement case to set a precedent at BofA, former SEC attorney Adam Pritchard said: “They (SEC) have the whip hand over a company, they have some policy agenda that they are pursuing, and they either lack the legal authority to do it, or it would create a political backlash.”