New York judge Jed Rakoff is expected to rule this week on whether the Charlotte bank can settle with the SEC for $150 million or must go to trial. The bank and the agency have been arguing for months over whether Bank of America properly disclosed billions of dollars of bonuses rushed out to Merrill Lynch employees in late 2008.

It's likely the judge still has concerns about the settlement, which doesn't specify where the money would come from and doesn't charge any individual bank executives.

"If you think this is over, you're kidding yourself," said Anthony Sabino, a lawyer at Sabino & Sabino in New York.

Even so, the reality of how the SEC operates may influence Rakoff to close the door on this case. After all, it's still harsher on the bank than the original proposal.

"Rakoff recognizes that the SEC has a lot on its plate," said Elizabeth Nowicki, a former SEC attorney now teaching at Boston University. "And sometimes the SEC needs to take the best settlement it can get in a reasonable amount of time as opposed to the best settlement in the world."

The $150 million proposal is nearly five times the size of the original, $33 million settlement offer. In each, the bank has been willing, without specifically admitting wrongdoing, to settle SEC allegations that it misled shareholders about $3.6 billion in bonuses paid at Merrill, which Bank of America bought last year.

The new proposal also specifies the settlement money would be put in a fund just for legacy Bank of America shareholders. But divvied out, it amounts to only about 3 cents per share.

The SEC says the amount is meant to penalize the company, not compensate shareholders for their losses. Tom Hazen, who teaches securities law at UNC Chapel Hill, said this is a common practice in disclosure lawsuits, especially when the prosecutors believe that shareholders will be able to successfully file their own lawsuits. "There are some violations where private suits are much more difficult to bring and win," Hazen said. "This is not one of those cases."

The SEC case underscores the blot the Merrill deal has put on the country's biggest bank. More than a year after the deal closed, the bank still faces private lawsuits and an investigation by the New York attorney general. The bank stands behind its purchase, noting that Merrill has made money for the bank. It has denied wrongdoing in the disclosure accusations and previously said it was ready to litigate.

Rakoff has repeatedly raised concerns that an SEC fine would be indirectly borne by the shareholders. Sabino said Rakoff might be satisfied if the money came from so-called "errors and omissions" insurance, which protects a company's leaders. At a hearing last week, an SEC lawyer told Rakoff that a company can pay fines by trimming bonuses and salaries.

At the same hearing, Rakoff questioned why the fine couldn't be $300 million or $600 million.

But Rakoff's concerns over the money might pale next to concerns that the new settlement proposal does not charge individuals at the bank or its law firm. That is a decision that Rakoff has repeatedly questioned. "I think he's going to say, 'I asked you to name names and you didn't do it,'" Sabino said.

The SEC often settles cases without charging individuals or requiring a company to admit wrongdoing, and it has said that it didn't have enough evidence to charge individuals in the Bank of America case.So far, that explanation hasn't appeased Rakoff, who says that such settlements never really establish what went wrong or who is to blame.

Rakoff, who has a lifetime appointment to his position, has been known to challenge the conventional wisdom of how businesses resolve their legal problems. In his written opinions, he often emphasizes protecting shareholders and the importance of transparency. In 2003, he refused to approve what he saw as a low settlement the SEC had negotiated with WorldCom.

In SEC vs. Bank of America, he has been harsh with both sides. Last fall, he reprimanded the SEC for not charging individuals, and asked the bank why it was willing to pay millions of dollars to settle if it was innocent as it professed. He told both sides that their original settlement "does not comport with the most elementary notions of justice and morality."

The new settlement calls for added oversight, including an independent auditor to review how the bank makes disclosure decisions, and a "super independent" consultant for the compensation committee.

Last week, Rakoff asked if the court could have more control in the oversight rules. He has proposed that either the court or the SEC be given a voice on who the bank picks for those roles, especially given the "incredibly bloated compensation of too many executives in too many American companies."

Nowicki, at Boston University, figures that a settlement would "ring the dinner bell" for lawyers who want to bring private lawsuits. "People don't pay $150 million in settlement if they haven't done something that's at least questionable," she said. She predicted that shareholders might also sue the bank's third-party lawyers who gave advice about what to disclose. The bank could also sue the lawyers, but Nowicki said that rarely happens.

"They turn in the same circles," Nowicki said. "And the executives really have no incentives to go after their lawyers, since the money isn't coming out of the executives' pockets."

If Rakoff does not approve the new settlement proposal, it's likely that the bank and the SEC will go to trial as previously planned, beginning March 1.