Lewis Testified That U.S. Urged Silence on Merrill Deal: Report

[elleng]

Source: NYT/Reuters

Bank of America Corp Chief Executive Kenneth Lewis testified under oath that U.S. Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson pressured the bank to not discuss its plan to buy Merrill Lynch & Co, the Wall Street Journal said.

In a testimony before New York's attorney general Andrew Cuomo in February, Lewis told prosecutors that he believed Paulson and Bernanke were instructing him to keep silent about deepening financial difficulties at Merrill, which BofA acquired in January.

Lewis testified that the government wanted him to remain silent while the two sides negotiated government funding to help BofA absorb Merrill and its losses, the paper said, citing transcripts of the testimony.



Read more: http://www.nytimes.com/reuters/2009/04/23/news/news-us-lewis-testimony.html

[kpete]

1. WSJ: BofA CEO says was told to be quiet on Merrill

Source: Associated Press

WSJ: BofA CEO says was told to be quiet on Merrill


By The Associated Press The Associated Press – Thu Apr 23, 1:48 am ET
NEW YORK — Bank of America Chief Executive Kenneth Lewis told the New York attorney general he believed former Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke wanted him to keep quiet about the worsening terms of the bank's acquisition of Merrill Lynch, according to testimony reviewed by The Wall Street Journal.

The New York AG's office plans to release the testimony on Thursday to federal regulators and overseers of bailout funds and banks, the newspaper reported after reviewing a transcript.

Lewis testified in February to New York Attorney General Andrew Cuomo's office, which has been trying to determine if Merrill and Charlotte, N.C.-based Bank of America failed to provide adequate disclosures to shareholders about the more than $15 billion in losses Merrill incurred in the 2008 fourth quarter and hefty bonus payments. Had they had that information, BofA shareholders might have voted down the deal.

The Journal said in Thursday's edition that Lewis doesn't say in the transcript that he was told specifically to remain silent about Merrill's burgeoning losses. But the paper quotes Lewis as testifying that disclosing that information "wasn't up to me," and that he was warned by Paulson and Bernanke that failing to complete Merrill's takeover would "impose a big risk to the financial system."



Read more: http://news.yahoo.com/s/ap/20090423/ap_on_bi_ge/bank_of_america_testimony

[annabanana]

2. whoopsie!

Why do I feel the urge to buckle up?

[fasttense]

3. AOL is calling him a hero?????

"But, a new, exclusive report from The Wall Street Journal shows that Lewis is a hero of the first order. He saved the financial world from ruin by going along with a plan concocted by the Treasury and Fed to keep Merrill’s problems confidential while allowing the B of A buyout of Merrill to continue."

http://247wallst.com/2009/04/23/how-ken-lewis-of-b-of-a-bac-saved-the-global-financial-system/

With hero like Lewis, who needs traitors?

[JackRiddler]

4. He "BELIEVED"... they wanted him to keep quiet? BULLSHIT.

His legal obligation is to tell the relevant information about the acquisition to the shareholders. He didn't do that and has now effectively confessed he did not do that. The excuses don't matter.

Since he failed do that, he must be indicted and prosecuted to the full extent of the law, and we can only hope he will rot in prison for the rest of his natural life, and not just for this crime.

If Bernanke and Paulson gave him any encouragement to commit this crime, then they must be indicted and prosecuted (on top of their very, very long additional rap sheet). If they actually pressured or blackmailed him, even worse.

May Cuomo have the balls. He's the only agent of law enforcement who seems to even be stirring on this front.

[DCKit]

5. Nah, a lot of the state AGs are walking around with wood right now.

They're busy coordinating their attack and getting their ducks in a row.

We haven't heard the last of NY's former governor and prosecutor, either.

[JackRiddler]

6. Glad to hear it.

Of course, almost everyone's going to have some kind of jurisdiction over these entities.

The federal government, though? Seems doubtful.

[No Elephants]

7. Don't securities laws require disclosure of an event like that?

[elleng]

8. An event like being pressured?

Don't think so. Things like indictments? YES.