BofA Given Hush Money: Will Lewis Step Down? 18 comments
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Bank of America Corp. (BAC) CEO Kenneth Lewis testified under oath that Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson pressured him to keep quiet about losses at Merrill Lynch & Co, which the bank was buying, the Wall Street Journal reported.
Testifying before New York Attorney General Andrew Cuomo in February, Lewis said "it wasn't up to me" to reveal Merrill's fourth-quarter losses as they were becoming apparent in December, the newspaper said, citing a deposition transcript.
Shareholders of Merrill and Bank of America voted to approve the merger on December 5, and the transaction closed on January 1. Bank of America subsequently reported that Merrill lost $15.84 billion in the fourth quarter.
At Bank of America's April 29 annual meeting, shareholders will vote on whether to force Lewis to step down as chairman of the largest U.S. bank or leave its board, because of Merrill and a falling share price.
Many critics also want Lewis to give up the Chief Executive job, which he has held since 2001.
The Journal said Lewis testified that Bernanke and Paulson told him the merger needed to go through and that any failure would "impose a big risk to the financial system" of the United States.
Cuomo's office is expected to release the deposition transcript to federal regulators and overseers of bank bailout money today, the newspaper said.
Staggering.
Disclosure: Author is long BAC preferreds
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This article has 18 comments:
It's like having my wife ask me, "Does this dress make me look fat?" I know the required answer to that one. But this is different. When it concerns information that would affect investors' perspective and the free market system the only answer is always "the truth." That is why hiding the truth or lying to shareholders & the public is illegal. How do the laws change when the lying and hiding of information is done by the government?
I believe such actions are classified as market manipulation. Have Bernanke, Geithner & Co. changed these laws? If not, who has been aware of the deceptions, who executed the deceptions, and who else was complicit within the government and the leadership of financial institutions? How many other deceptions have been perpetrated on the public? How many more are planned?
I'm not calling for heads to roll. I just want to know the truth. Then we, the people, should be allowed to sort through the information and determine whether court actions are appropriate or even necessary. If attempts at market manipulation have actually occured, and if those attempts were specifically intended to manipulate through public deception or misinformation, then there should be no one who is above the law. If not, we just struggle through this mess and move on.
Lehman it'self almost took the country down can you imagine couple with a Merrill failure wha would have occured..?
We've heard these claims float around, usually when a large amount of our money is about to be handed to these incompetent and greedy risk takers, but not one person has produced one scrap of hard evidence. The evidence we have seen (e.g. GS made whole 100 cents on the dollar) contradicts what those same people have been saying (we don't need this help, we're fine... really).
1) He stated they didn't need to see Merills books because htye already knew the assets
2) he then sent his flunk (I forget his name) over to Merrill to value those assets
3) the merrill guy resigned instead of agreeing to the site down of the assets, and the BofA guy signed off on them
4)Using these newly lowered values he created he went to the government and said he was thinking about getting out of the deal because of the lowered balance sheet he created
5) he essentially blackmailed the gov't into giving another 20 billion 6) then on the new financial reports Merrill is the part of the company that is making money
This report once again proves the disinformation campaign going on by our government
Let us not forget that he also lied about the bonus, and in fact he was aware. The bonus was hush money. I will bet a large amount of that went to the group that valued those lowered value toxic assets.
The same hush money went to AIG keep quiet while we pay off GS in full.
These same powers would like you to believe that without them our system will collapse. In fact the exact opposite is true. In order to make excessive profit their business model depends on excess credit. excess credit destabilizes the system. it does not make it stronger.
This is one example of the concerted power grab by wall street that is happening. It is being done in stealth, and will lead us to ruin not health.
If you don't believe me read what a former head of IMF has to say.
www.theatlantic.com/do...
On Apr 23 11:25 AM HBWOW wrote:
> Lewis states that he was told to keep quiet but did this also mean
> that he would be so stupid as to also allow the Twain bonuses and
> simply act like a empty headed top management figurehead. The deal
> he made for Merrill was not in the best interests of B of A nor its
> stockholders. It should have been a bargain basement transaction
> based on Merrill real condition and the "surprise" bonuses.
On Apr 23 11:49 AM dcb wrote:
> The Ken Lewis supporters are clearly getting paid to put stuff on
> blogs as part of the government disinformation campaign that has
> been going on. Ken Lewis deserves hard core jail time.
> 1) He stated they didn't need to see Merills books because htye already
> knew the assets
> 2) he then sent his flunk (I forget his name) over to Merrill to
> value those assets
> 3) the merrill guy resigned instead of agreeing to the site down
> of the assets, and the BofA guy signed off on them
> 4)Using these newly lowered values he created he went to the government
> and said he was thinking about getting out of the deal because of
> the lowered balance sheet he created
> 5) he essentially blackmailed the gov't into giving another 20 billion
> 6) then on the new financial reports Merrill is the part of the company
> that is making money
>
> This report once again proves the disinformation campaign going on
> by our government
>
> Let us not forget that he also lied about the bonus, and in fact
> he was aware. The bonus was hush money. I will bet a large amount
> of that went to the group that valued those lowered value toxic assets.
>
>
> The same hush money went to AIG keep quiet while we pay off GS in
> full.
>
> These same powers would like you to believe that without them our
> system will collapse. In fact the exact opposite is true. In order
> to make excessive profit their business model depends on excess credit.
> excess credit destabilizes the system. it does not make it stronger.
>
>
> This is one example of the concerted power grab by wall street that
> is happening. It is being done in stealth, and will lead us to ruin
> not health.
> If you don't believe me read what a former head of IMF has to say.
>
> www.theatlantic.com/do...
On Apr 23 10:19 AM VVH wrote:
> Transparency??? Right!!! Do not believe eveything our government
> tells us! Lewis was asked to step into the fire at a time when the
> financial world was burning--and, he did. For his actions, he was
> offered protection for BofA against Merrill losses. In the long run
> shareholders (me included) as well as, the Financial Markets and
> Main Street, will benefit from this acquisition because it prevented
> further hemorrhaging and panic during one of the most chaotic times
> in our financial history. So, wise up and let Mr. Lewis finish the
> task of putting Bank of America on the right path again. We need
> intelligent CEO's behind our largest companies to manuever thru these
> turbulent waters---and, Ken Lewis fits that mold.
On Apr 23 09:57 AM Johnc222 wrote:
> Ken Lewis is a Hero...Not a Villian. he saved America from ruin,..yes
> his stock holders took a huge hit but America was saved.
> Lehman it'self almost took the country down can you imagine couple
> with a Merrill failure wha would have occured..?
>
> This is what happens when you play ball with the U.S. Government
> in the end they shove the Bat right up your...AZZ.
On Apr 23 09:55 AM Mark Bern wrote:
> Well, surprise, surprise! Keep this quiet until we tell you. We need
> to raise consumet confidence in the financial system before the economy
> can get better so what does our government do? They have hidden the
> truth because it might hurt.
>
> It's like having my wife ask me, "Does this dress make me look fat?"
> I know the required answer to that one. But this is different. When
> it concerns information that would affect investors' perspective
> and the free market system the only answer is always "the truth."
> That is why hiding the truth or lying to shareholders & the public
> is illegal. How do the laws change when the lying and hiding of information
> is done by the government?
>
> I believe such actions are classified as market manipulation. Have
> Bernanke, Geithner & Co. changed these laws? If not, who has
> been aware of the deceptions, who executed the deceptions, and who
> else was complicit within the government and the leadership of financial
> institutions? How many other deceptions have been perpetrated on
> the public? How many more are planned?
>
> I'm not calling for heads to roll. I just want to know the truth.
> Then we, the people, should be allowed to sort through the information
> and determine whether court actions are appropriate or even necessary.
> If attempts at market manipulation have actually occured, and if
> those attempts were specifically intended to manipulate through public
> deception or misinformation, then there should be no one who is above
> the law. If not, we just struggle through this mess and move on.
On Apr 23 11:49 AM dcb wrote:
> The Ken Lewis supporters are clearly getting paid to put stuff on
> blogs as part of the government disinformation campaign that has
> been going on. Ken Lewis deserves hard core jail time.
> 1) He stated they didn't need to see Merills books because htye already
> knew the assets
> 2) he then sent his flunk (I forget his name) over to Merrill to
> value those assets
> 3) the merrill guy resigned instead of agreeing to the site down
> of the assets, and the BofA guy signed off on them
> 4)Using these newly lowered values he created he went to the government
> and said he was thinking about getting out of the deal because of
> the lowered balance sheet he created
> 5) he essentially blackmailed the gov't into giving another 20 billion
> 6) then on the new financial reports Merrill is the part of the company
> that is making money
>
> This report once again proves the disinformation campaign going on
> by our government
>
> Let us not forget that he also lied about the bonus, and in fact
> he was aware. The bonus was hush money. I will bet a large amount
> of that went to the group that valued those lowered value toxic assets.
>
>
> The same hush money went to AIG keep quiet while we pay off GS in
> full.
>
> These same powers would like you to believe that without them our
> system will collapse. In fact the exact opposite is true. In order
> to make excessive profit their business model depends on excess credit.
> excess credit destabilizes the system. it does not make it stronger.
>
>
> This is one example of the concerted power grab by wall street that
> is happening. It is being done in stealth, and will lead us to ruin
> not health.
> If you don't believe me read what a former head of IMF has to say.
>
> www.theatlantic.com/do...
Dont confuse this with economic recovery... its just shifting losses but those losses will be assumed sometime by somebody... the taxpayer & the middle class. Watch out high taxes & continued fall in housing.
On Apr 23 02:09 PM Cetin Hakimoglu wrote:
> The masters of the universe earned their position through meritocracy.
> Kenneth Lewis creates value with years of profitability, as opposed
> to the insolent General Motors run by the incompetent, befuddled
> Rick Wagner.