{"id":189877,"date":"2010-02-04T21:22:00","date_gmt":"2010-02-05T02:22:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2010\/02\/04\/andrew-cuomo-sues-ken-lewis-and-bank-of-america-for-fraud\/"},"modified":"2010-02-04T21:22:00","modified_gmt":"2010-02-05T02:22:00","slug":"andrew-cuomo-sues-ken-lewis-and-bank-of-america-for-fraud","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2010\/02\/04\/andrew-cuomo-sues-ken-lewis-and-bank-of-america-for-fraud\/","title":{"rendered":"Andrew Cuomo Sues Ken Lewis and Bank of America for Fraud"},"content":{"rendered":"

Now that the SEC has settled with Bank of America over its misrepresentations, New York State Attorney General Andrew Cuomo<\/span> is going after the bank for the same thing<\/a>:<\/p>\n

Former Bank of America Corp. Chief Executive Officer Kenneth Lewis was sued by New York Attorney General Andrew Cuomo<\/span> for defrauding investors and the government when buying Merrill Lynch & Co. The bank agreed to pay $150 million to settle a related lawsuit by U.S. regulators.<\/p>\n

Cuomo<\/span> also sued the bank\u2019s former chief financial officer Joe Price and the bank itself for not disclosing about $16 billion in losses Merrill had incurred before it was bought by Bank of America in an effort to get the merger approved. Afterwards, Lewis demanded government bailout funds, Cuomo<\/span> said.<\/p>\n

\u201cWe believe the bank management understated the Merrill Lynch losses to shareholders, then they overstated their ability to terminate their agreement to secure $20 billion of TARP money, and that is just a fraud,\u201d Cuomo<\/span> said today at a telephone press conference. \u201cBank of America and its officials defrauded the government and the taxpayers at a very difficult time.\u201d<\/p><\/blockquote>\n

Of note is the fact that Bank of America performed its due diligence on Merrill Lynch in only 25 yours<\/span>, which, along with their firing of their general counsel when he suggested that there might be issues, does appear to indicate that something stinks here.<\/p>\n

Another bit of weirdness is that while BoA<\/span> had intended to buy a brokerage for some time, it wasn’t Merrill, at the board meeting in which the proposal was mooted, most of the board members thought that they would be purchasing Lehman<\/a>:<\/p>\n

When Bank of America Corp.\u2019s board met to approve the acquisition of an investment bank on Sept. 15, 2008, members thought they were going to buy Lehman Brothers Holdings Inc., not Merrill Lynch & Co., according to New York Attorney General Andrew Cuomo<\/span>.<\/p>\n

The bank bought Merrill after examining its books for just 25 hours, Cuomo<\/span> claimed. Shareholders approved the deal Dec. 5, 2008. The acquisition closed Jan. 1, 2009, after Merrill losses had increased by billions of dollars, a change the bank didn<\/span>\u2019t disclose before the shareholder vote, Cuomo<\/span> said.<\/p>\n

\u201cIt\u2019s the way we approved acquisitions that ticks me off the most!!!\u201d director Chad Gifford later wrote in an e-mail about the last-minute switch, according to a securities-fraud complaint Cuomo<\/span> filed today in New York against the bank, former Chief Executive Officer Kenneth Lewis and ex-Chief Financial Officer Joe Price over their handling of the Merrill deal.<\/p>\n

E-mails and written notes that were gathered by Cuomo<\/span> for his investigation of the matter show personal reactions of executives as they learned of Merrill\u2019s rising losses, which reached $16 billion before taxes by December 2008. They also show Merrill kept Price informed of the losses as they grew, yet he resisted pressure from his lawyers to disclose them to shareholders.<\/p>\n

\u201cRead and weep,\u201d wrote Bank of America accounting officer Neil Cotty<\/span> to Price on Nov. 4, 2008, when Merrill\u2019s financial reporting unit forwarded preliminary October results with a loss of $6 billion. The merger documents had already gone out to shareholders. Five days later, the October loss was put at $7.5 billion before taxes. <\/p><\/blockquote>\n

I think that this was a deliberate scheme to get some more taxpayer money to do the deal, and I hope that Cuomo<\/span> goes where the SEC did not, and throws Ken Lewis’ sorry ass in jail.<\/p>\n

H\/t Huffpo<\/span><\/a> for the full complaint (90 pages, scrollable PDF<\/span> window) after the break.
<\/a><\/p>\n

<\/object>
BoA<\/span>_Complaint<\/a> – <\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Now that the SEC has settled with Bank of America over its misrepresentations, New York State Attorney General Andrew Cuomo is going after the bank for the same thing: Former Bank of America Corp. Chief Executive Officer Kenneth Lewis was sued by New York Attorney General Andrew Cuomo for defrauding investors and the government when …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[970,1004,972,985],"tags":[],"class_list":["post-189877","post","type-post","status-publish","format-standard","hentry","category-corruption","category-finance","category-justice","category-regulation"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/189877"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=189877"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/189877\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=189877"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=189877"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=189877"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}