Cuomo Takes on The Money Party - "They knew what they were doing every step of the way."

[autorank]

Bank of America Looks Like First of Many

Michael Collins

American Politics Journal

Andrew Cuomo's complaint filed in the New York Supreme Court, County of New York against the Bank of America and two former top executives has the potential to push that too big to fail entity off the edge of a very steep cliff. The charges of massive fraud are based on a compelling and exhaustive filing on February 4.

A trial will likely involve testimony by the current Bank of America CEO and President Brian Moynihan against defendants Kenneth Lewis, the bank's former CEO and board chairman, former chief financial officer (CFO) Joseph L. Price, and the bank itself. Price is currently in charge of BofA's credit card division.

The complaint charges fraud before, during and after the bank's merger with struggling brokerage firm Merrill Lynch in late 2008. The fraud cost bank shareholders and citizens billions of dollars. This is the first major case brought against our nation's largest financial institutions. These are the same financial institutions and executives that nearly destroyed the economy.

Cuomo's press release states clearly that Lewis and the bank are examples of a much larger problem. It appears to be a leading indicator of future actions by the New York attorney general. Why else would Cuomo have generalized about institutions (plural) in his statement about this particular case?

If Cuomo succeeds in taking down one of the toughest guys on the block, he'll make a point to the rest of the crew: you're next, get ready to cooperate. Many of the key perpetrators are located in Cuomo's jurisdiction, although Bank of America (BofA) is headquartered in Charlotte, North Carolina. Clearly, there are others in line for some New York style law and order.

The full article at American Politics Journal may be reproduced in full or part with attribution of authorship and a link to this article.

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[mod mom]

1. Cuomo is of course correct!

:hi: how've you been?

[autorank]

4. Snowed in! 30" ugn. But better since I researched Cuomo's big move

:hi: Yourself?

[mod mom]

6. We're cold (teens) and about to get hit with another 6-9 inches....

but not as bad as you guys in the mid atlantic.

I'm pretty much fed up with politics. :mad:

[puebloknot]

10. Warms the cockles of your heart, eh? It's snowed in Santa Fe ...

... over the last three weekends. It's beautiful here, and there's just enough snow for beauty, but it melts pretty quickly.

Up the road apiece, there's a ski area where the snow remains for the season.

Nanna, nanna, nanna, we've got snow *and* blue skies! :)

[sueh]

2. Don't stop, Andrew!

[autorank]

3. Cuomo's complaint is linked at the main article. It is a work of art!

I'm amazed, truly. He and his team are first rate, what I'd expect out of NY.
The complaint is 90 pages but reads like the Grishom. It just rocks.

He's making a very bold move. It's a tradition to earn your way up the ladder in NY by
big prosecutions - Thomas Dewey, Rudy, and others have done it. It will be like the
Roman games and Cuomo is a Roman in that analogy. :thumbsdown: when it comes to
penalties.

[JDPriestly]

46. Reads more like a trial brief than like a complaint.

Cuomo has his ducks in a row.

[autorank]

60. "complaint" is just thei NY term. You're right, ducks lined up

Almost like they're in a barrel. That's the dilemma here. Coumo could probably settle this
given all the bank has to lose. He's cool if the settlement is big enough and he taunts them
afterwards to get the populist rage boiling. He'll have to continue. This is civil, he could
find ways to go criminal.

[unc70]

61. More like a "Work of Artifice" to me. Deliberately misleading.

I already posted I thought it likely that Cuomo was making a big show going after "Wall Street" by going after one of the few large banks not in NY, BofA located in NC, and not after ones with political clout in NY. I decided to read the filing (all 90 pages) before considering the merits of the case. Probably resistant to joining the mob after BofA because I live in NC and still have some goodwill from when it was NCNB/NationsBank.

As I started reading the complaint, I noticed things like someone "knew or should have known" some fact, then built the next claim assuming he knew and then deliberately mislead some other party. Later in the details sections the language becomes even weaker "knew or were reckless or negligent in not knowing" while still building the case that they had knowingly lied and mislead others. As I saw this repeated throught the document, I realized they lacked proof that those at BofA knew various things that maybe they should have known.

What was the pervasive problem with what those at BofA "knew" about the losses, given the direct statements that ML was transparent and disclosed fully those same items? What key fact was barely noticed among other items? A little study, and there it was starting on Page 14, par 63. The reports provided by ML had been changed to track actual losses to date and not projected losses for the entire quarter, but the labels had not been changed accordingly.

"Thus while the reports contained anachronistic labels like "forecast" and "projection", they in fact tracked actual losses."

Who at BofA knew that what might appear to be an estimate of losses for the full quarter was in fact the actual losses quarter-to-date?! When did they find out?

If one assumes that none of those at BofA had realized the problem until after the delivery by ML of the November report Friday night, Dec 5, hours after the shareholder vote, then the actions by BofA appear appropriate.

[Skink]

5. what kind of scandal are they going to take him down with?

[autorank]

22. They're not allowed to use sex twice in a row in the same state

That's in the unofficial rule book;)

They're better not mess with Cuomo. Even if they try to make it looks like they have something
on him, that will be spotted immediately. Then the outcome won't be pretty. I don't think there is
any peraonal scandal that can stop this.

[truedelphi]

27. This is exciting. Not as exciting as

The Snowmageddon, but still...

I hope that Cuomo is warming us up for a full frontal attack on AIG and Goldman Sachs. That would really make me happy.

Why was Cuomo peeved at Bill Clinton? <circa mid-nineties> Or was that some other Pol that Clinton had a tiff with?

[autorank]

39. I don't know about the tiff

If Cuompo gets justice and proceeds on this path with GS and AIG and Chase, he can dress in drag and
he'll have a 90% approval rating nationwide!

[stevedeshazer]

7. How can you not like this guy?

The timing is beautiful, too.

If this becomes as big a story as it potentially is, it might be a game-changer.

:hi:

[autorank]

13. steve, tThat'ds the sense i got of it

I was trying to figure out what was up and not getting the answers. The two things occurred to me:

- he flipped the current BofA CEO who is "not charged" and
- that guy will testify against the bank, the former ceo, and the current head of the credit card division (Price).

Holy shee-ite! This is going to be a spectacle. The top execs and many others at BofA will have a
feeding frenzy and they're the meal.

And SIGTARP Barofsky is on board. Another New Yorker (NYU Law, suma).

This is the first real shot at the creeps who've ruined everything. If Cuomo gets his trial and mails
these bastards, we're in for much more.

I'll follow this one, maybe get a ring side seat;)

[JDPriestly]

48. Me too. Cuomo has already obtained and organized all the facts.

This should not take long. (Famous last words.) Defense counsel is Mary Jo White according to the article, so there will be a fight.

White was born in Kansas City, MO and grew up in McLean, VA. She received her B.S. from the College of William and Mary in 1970 and her law degree from Columbia Law School in 1974. White was appointed to the position by President Bill Clinton. She is noted for having overseen prosecutions of John Gotti and the terrorists responsible for the 1993 World Trade Center bombing chief among them Ramzi Yousef. After Clinton's controversial last day presidential pardons, she was appointed by new Attorney General John Ashcroft to investigate Marc Rich's pardon. She is currently chair of the litigation department at Debevoise & Plimpton.

http://en.wikipedia.org/wiki/Mary_Jo_White

[Joe Chi Minh]

50. Stunning news. The ramifications could be as enormous as the fraud.

[EFerrari]

8. Thanks for some good news!

:toast:

[autorank]

23. It will get better once a trial starts

:toast:

[puebloknot]

9. K&R Well, yes, but who has he been sleeping with out of wedlock?

Let's get down to the important stuff!!!!

Joking aside, this is hopeful.

Chase Manhattan Bank is located in New York. I know I'm small potatoes, but I'm going to see if there's a way to complain about them holding onto $8,000 of my money for over a week when I needed to spend it on medical issues.

If enough little birds cheep loudly, maybe we could get some attention.

I'm wondering what happens to the ordinary people who are dealing with B of A, if it goes down. I'm pretty naive fiscally, but what happens to protect depositers who have their life savings, or their latest paycheck, in a big bank like this.

You're always on top of things, Michael Collins. Thanks for your work!

[autorank]

14. This could shove BofA over the cliff with a full trial and vertict for the people

The spectacle of bank executives testifying against each other and the fact that the current CEO
is guilty as hell but spared because he talked -- whoa!. Who would bank with them? Run by a guy
who was guilty as Hell but cut a deal and testified against his pals.

This may gove Congress enough cover (correction: enough of a shove) to do some real regulation.

If there's a trial and win, then the next up for Cuomo will be the turning point. BofA is headquartered
in NC. But the rest are in nYC. If Chase or Goldman then the feeding frenzy starts.The odds are
probably against a full scenario like this but there's, for the sake of it, a 30% chance it can happen.

If it plays out for Cuomo, then we'll get relief. If not, well...

[laughingliberal]

33. That kind of thing would be great. Even if local new affiliates pick it up, it can wind up on the

Today show. Public sentiment needs to stay firmly behind regulating the crap out of these crooks.

[Me.]

11. A Big K & R

[autorank]

15. "Who woulda thunk it?"

The perfectly coiffed Andrew emerges from the ante room of dread, Albany, and captures the enemy
of the people. I'm expecting he'll wear a purple tie. Brutal fines and exile;)

[Me.]

18. God I Hope So

It's what I missed about Spitzer

[inna]

12. KR+14, and excellent news!

Let's just hope he stays away from hookers and small planes, we really need this guy!

[autorank]

25. The dual hazzards;)

:hi:

[autorank]

16. Thank you BuzzFlash.Com - front page

BuzzFlash.com

[EFerrari]

17. Good job!

lol

[BeFree]

19. Yeah, hope

It would be nice to see one of the big boys get smacked for once.
We little folk get 30 days in the hole for nothing, but the fat cats
rob and steal the country blind and always get away. Maybe not, this time?

[truedelphi]

29. Congratulations, for work well done. n/t

[GiveMeFreedom]

20. First I would like to say

FUCK BANK OF AMERICA !!!

These fucking thieves, money changers, masters of the universe are THE problem. Big financial institutions and Wall Street need to be regulated and regulated with a tourniquet around their spindly necks. If there ever is a second revolution in America that sheds blood of tyrants and patriots, these fuckers will be the cause of it, no doubt in my mind.

[autorank]

21. Clearly stated

Remember WorldCom and the crook in charge of that Bernie Ebbers? Same deal, just a different company
and a different guy - just like Bernie. Lewis is an ass. Anyone should figure out that just listening
to him and watching him. This prosecution had better not be derailed by a bought judge or some other
Money Party trick. This is the best, last shot for some people based resolution of this (a full series
of state and federal prosecutions). If The Money Party thinks they can screw everyone like this and
walk away, they're on crack.

[truedelphi]

28. Your clarity is spot on.

And it is not a waste of the red ink, not in my book anyway.

[bridgit]

24. That's the way it played. They ran every graph off the chart mere months before bush...

was to leave and gave the nod to Paulsen who wrote up one of the strangest 3 page bank heist notes in the annuals of robbing banks - sure they knew it they all knew it, and they seemed to have an inside opinion on just who was going to pay for it all while they played 'catch me if you can'

Take them down

[autorank]

26. ... all the way down!

This isn't a long shot, there are good odds behind Cuomo but it requires more than just a great case.

The judge assigned is critical, worth looking into that soon.

The real risk for the defendants, imho, is the viability of BofA (the named corporate/"person" charged
in addition to the two unambiguously "person" crooks). Who would trust their money in a bank run by
an unindicted co-conspirator who testified at the former top guy and the person currently in charge
of credit cards? Just saying is is harsh ...

[formercia]

30. The legal bill.......

Who's going to eat that?

Too bad public hangings aren't politically correct anymore.

[autorank]

41. This is a legal World Cup

The defense will drain the lake dry, count on it. But they have no case. Cuomo's
complaint is so tight they'll beg for a deal. It will have to be brutal to scare
the next in line!

[formercia]

43. I can hear the squeals already.

I hope Cuomo doesn't let them cop a plea.

[autorank]

45. The conventional wisdom is that the prosecution settles

But, after researching this, as much as is possible right now, I'd bet that the defense want's to settle
and that Cuomo doesn't. He gave them a chance, for several weeks, and they wouldn't budge. The new
reality may change Cuomo's view. Smart money says no deal by him, I think.

[Joe Chi Minh]

51. Don't worry. Demeter will turn up with her guillotine!

[PuraVidaDreamin]

31. So Moynihan is the current president and CEO of Bofa?

and he sang.... Who is physically protecting him?

A page turner indeed.

Good job!

[autorank]

40. Yes indeed. Cuomo flipped Moynihan and got him to squeel!

Just download the complaint and do a search for "Moynihan." He's all over the place. Clearly
he knew and he avoided prosecution by talking. What a theater event this will be with all of
them testifying against each other.

The.Street.Com wrote that BofA folks were glad that Moynihan was not indicted. Wow, is that lame.
No comment on him being in place as head of the bank and only avoiding the charges by turning on his
former boss and current credit card division head. Moynihan is testifying against the Bank of America
as a corporate entity (aka "person") since the bank is charged!

Sweet!

Don't waver Andrew, you're about to hit it out of the park!

[unc70]

62. As I previously explained, Cuomo is deliberately avoiding what probably happened

Has nothing to do with flipping Moynihan or misleading outside counsel, or any of the other headline-grabbing attempts.

The important thing for everyone to understand about the Cuomo complaint is that it is very weak; if it had proof of anything stronger he would have gone with it and would not have all those hedging statements like "knew or was negligent in not knowing". Why the weasel words? What is that all about?

The key to understanding why this Complaint is intrinsically flawed begins at the bottom of page 14 and continues on page 15. These sections describe the ML system for tracking quarterly losses and their daily reports of their current situation. The Complaint states that sometime after Q4 2007, the ML system was changed from showing projected losses for the full quarter to showing actual losses Quarter-to-Date. But guess what? They apparently did not change the report labels!!! The complaint states:

"Thus while the reports contained anachronistic labels like "forecast" and "projection", they in fact tracked actual losses."

"Anachronistic labels"? Is that the same as "Misleading labels" or "Fraudulent labels"?

So the question becomes, "Who if anyone at BofA knew that the reports from ML to BofA included labels and titles that claimed the report showed projected losses for the full quarter when they were really showing the actual losses quarter-to-date? When did those at BofA become aware the data was not what it appeared? Was this caused by an accidental mis-communication between the parties or an effort to confuse and mislead anyone attempting due diligence on ML, in other words fraud?

Since the NY AG filed a complaint while clearly aware of this critical distinction, does the AG have evidence that proves that those at BofA were aware of this material fact prior any alleged fraudulent actions on their part? If not, Cuomo, et al have some explaining to do.

[Jackpine Radical]

32. I hope Cuomo has a history of keeping his dong in his pants.

You can bet right now that a bunch of big-bux investigators are out trying to dig up whatever they can to Spitzerize him.

[laughingliberal]

34. Maybe I'm naive but I don't even think that will work.

I really don't know why those guys who get caught don't just stand up and say they're sorry for the pain they cause their families and now ask that we respect their privacy while they work things out and go about the business of doing their jobs. After all, Sanford is still governor of South Carolina.

[Jackpine Radical]

35. Mostly it works because they have the M$M corporate noise machine on their side.

You know--like 600 teabaggers in 2010 versus 1.5 million antiwar protesters in 2002-2003. Who got the coverage?

But as I said elsewhere, I think the Dems could make great hay out of it if they lose favor with Wall Street. Having the White House and Congressional majorities does get you a little more coverage than otherwise.

[autorank]

38. Yep

This is the FIRST big case against the crooks everyone is mad about. There are plenty of Republican
State AGs but none has acted. I hope Cuomo doesn't settle or if he does, that it's absolutely
brutal on BofA. He'll be a national hero if he does. People want improvements but also an
evening of the score and accountability (e.g., retribution).

[Mari333]

36. woot. knr

[autorank]

37. THNX

Moments of courage amidst a sea of denial.

[Greyhound]

42. K&R. Here's hoping he wins.

[omega minimo]

44. Thank you Mr. Cuomo, just don't use any escort services!

[katty]

47. go Cuomo!-be sure to stock up on bodyguards

[bertman]

49. Thanks for posting this, autorank. Excellent reading. Rec nt

[Joe Chi Minh]

52. Yes. Thanks, Mike. It's made my day.

[ooglymoogly]

53. Not to worry banksters the supremesters have your backs. kr nt

[autorank]

57. They're thoughtful, aren't they?

There are powerful forces aligned against doing anything to hold the greedy ones accountable.
Cuomo has incentive to overcome that and be the first to put the heat to them. If it gets to court,
and it should unless Cuomo agrees to settle, then they're toast. He's got a great case. We'll see.

[omega minimo]

54. .

[autorank]

55. ..

[amborin]

56. K&R

[maryf]

58. Thanks so much...

great article, glad the snow let me catch it! Somebody to be proud of here in NYS...

[Odin2005]

59. Stay out of small planes, Mr. Cuomo.

The Money Party doesn't like uppity populists.