Was Ken Lewis Silenced, Threatened by Bernanke and Paulson?

Bank of America's (BAC) Ken Lewis' testimony sheds some light on the gory details of last year's crisis management. From the WSJ (sub. req.):

Mr. Lewis, testifying under oath before New York's attorney general in February, told prosecutors that he believed Messrs. Paulson and Bernanke were instructing him to keep silent about deepening financial difficulties at Merrill, the struggling brokerage giant. As part of his testimony, a transcript of which was reviewed by The Wall Street Journal, Mr. Lewis said the government wanted him to keep quiet while the two sides negotiated government funding to help BofA absorb Merrill and its huge losses.

The cost of refusing to keep shareholders in the dark might have been his job:

The Wall Street Journal previously reported, in a page-one story on Feb. 5, that Mr. Lewis agreed to proceed with the Merrill merger only after Messrs. Paulson and Bernanke said that he and his board would lose their jobs if Bank of America backed out of the deal. Mr. Lewis's testimony with the New York attorney general's office corroborates that account.

At a time when Bernanke, the Fed and Paulson' replacement at Treasury Tim Geithner are facing charges of weakness and inefficiency its interesting to get the details on their willingness to strong-arm major financial sector players during the crisis.

Bernanke denies any threats to Lewis.

Comments

[dcb]

3.bp.blogspot.com/_zr6...

2009 Apr 24 09:25 AM

[chun12082038]

that'sone of the female senator in Hong Kong, once have been said her late husband told her to hold on her Merill lynch stock because he said if Merill gone then America will finish too, may be that the same idea of those paulson and bernanke having too

2009 Apr 24 09:43 AM

[Trane250]

Ken Lewis suffers from delusions of grandeur. He thought that his business acumen and personal charisma could build the greatest financial institution in world history. Thus did he drool at the chance to gobble up the failed Merrill Lynch. Too hell with the stockholders, my destiny awaits.

2009 Apr 25 11:09 AM

[Greame H]

There is an amazing naivety throughtout large sections of society when it comes to government behavior
Sure the Soviet Union was an "evil empire" but let's not delude ourselves that it was the only one!

2009 Apr 25 11:23 AM

[HBWOW]

Mr. Lewis keeps coming up with more (I think or thought) responses and continues as the king of most evasive insiders in the banking debacle. Is there a question as to whether he knew the whole Merrill deal (yes, including the last minute "bonuses") or not? If he didn't, then he has to be the most inept CEO on this earth and if he did, he knowingly defrauded the public, the stockholders, and the government.
EITHER WAY, full investigation and proper punishment is in order.

2009 Apr 25 12:02 PM

[henarl]

Paulson and Bernanke coercing anyone? Say it aint so. Ken Lewis screwing the shareholders to save his job? Surely not.
How terribly disillusioning.

2009 Apr 25 12:12 PM

[Buckoux]

Get a rope! Better yet, bring the whole roll.

2009 Apr 25 01:05 PM

[jambo]

Lewis- went along, no doubt. There are so many BS "statistics" with regard to balance sheets (hello housing bubble, declared income loan practices!) that it is ludicrous to attempt to single out one guy. Especially one who has been given 'the plan' by the powers that be in D.C./N.Y.
Had he, or any other of the culpable, pulled the rug and told the truth and that had resulted in a further slamming of the financial markets- well we'd have strung him up for that too. Talk about a no-win. Go ahead, put yourself there before castigating a man.

2009 Apr 25 02:22 PM

[Econ 101]

BAC was over $40 a share in May of 2008. On Friday it was at $9.47. That was up from the 20 Feb low of $2.53 due to this bear rally. And you think Ken Lewis did a good job??

To quote Red Foreman, "You're a DUMB ASS"


On Apr 24 12:25 PM Cetin Hakimoglu wrote:

> Yea, this is just speculation. I still think Ken Lewis did a good
> job. Bank of America has been extremely profitable, and will is a
> market leader.

2009 Apr 26 01:06 AM