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Days before BofA (BAC) shareholders approved the bank's $50B Merrill Lynch purchase, bank execs...

Days before BofA (BAC) shareholders approved the bank's $50B Merrill Lynch purchase, bank execs were told Merrill's losses would hit the combined companies' earnings for years, but chose not to share this info with shareholders. Court documents filed yesterday shed new light on the disconnect, and will likely put more pressure on federal officials to hold key execs accountable for their crisis-era (in)actions.
Comments (16)
  • " bank execs were told Merill's losses would hit the combined companies' earnings for years"

     

    Did it??
    4 Jun 2012, 04:51 AM Reply Like
  • Told, by whom, the Feds who then said you must buy this dog because we cannot handle another financial collapse?
    4 Jun 2012, 04:57 AM Reply Like
  • As a long term holder of BAC would someone please remind me. I realize I should write every thing down because the grey cells aren't as sharp as they used to be.
    Didn't our economic leaders in Washington push BAC to the wall with the threat that if they wanted bail-out monies,they would first have to buy Merrill & Countrywide? I don't know of any other promises of help,or threats but I sure wish I had been a fly on the wall with a recorder during those terrible days.
    4 Jun 2012, 05:40 AM Reply Like
  • "Didn't our economic leaders in Washington push BAC to the wall with the threat that if they wanted bail-out monies,they would first have to buy Merrill & Countrywide?"

     

    Absent Countrywide, that is my understanding as well. If anyone should be taken to the woodshed on the Merrill deal it's Treasury & Fed Reserve. Countrywide was the reason BofA needed TARP, the pending of a Leahman style collapse was the reason govt. needed BofA.
    4 Jun 2012, 12:17 PM Reply Like
  • Additional thought. Chris Dodd was kneedeep in Countrywide. Yes, that Chris Dodd.
    4 Jun 2012, 03:02 PM Reply Like
  • Lewis should be commended for the actions taken on that fateful day when BAC rescued the whole economy with those moves to take over Countrywide and Merrill. Where would we be today without that move? We could well still be in a recession if not the worst depression in the history of the United States.

     

    Continued litigation over the moves and the endless "what if" scenarios is not helping the current turnaround. Stockholders should realize that if Lewis didn't act as he did, BAC could now be in bankruptcy and be facing a complete loss of their investment.
    4 Jun 2012, 06:12 AM Reply Like
  • Lewis-BAC tried to exit the Merrill deal when told of the big losses days before the vote, but Hank Paulson forced Lewis and BAC to complete the purchase. This is well known, published at the time, and described by Paulson in his book. BAC has done nothing but pay pay pay for this every since, and it sounds like it's going to get worse, as Adminisration officials keep attacking "Wall Street," the small part of BAC that used to be Merrill. BAC's marketing people need to talk about public and municipal finance -- how BAC makes possible about one-fifth of every building project in America.
    4 Jun 2012, 06:38 AM Reply Like
  • Did Lewis actually lie for the country's sake ?
    4 Jun 2012, 07:19 AM Reply Like
  • "Did Lewis actually lie for the country's sake ?"

     

    I hope so.
    4 Jun 2012, 12:19 PM Reply Like
  • All of this swirl about what BAC shareholders should have known about Merrill is really a distraction from the real issues with Merrill, Lehman, Citi, Bear, Wachovia, et al. How come not one of the C levels from any of these companies has been charged, criminally or civilly?

     

    Wasn't SOX supposed to make certain C level execs personally responsible for financials? How do you manufacture and market crap instruments, sell them, sign off on the financials and then not be held accountable? How do you hold things off balance sheet and not be investigated for fraud?

     

    BAC may have its issues, but this is just another distraction from the fact that the guys who are mostly to blame for this mess have walked away unharmed.
    4 Jun 2012, 07:49 AM Reply Like
  • "How come not one of the C levels from any of these companies has been charged, criminally or civilly?"

     

    Because their defense would be; "the government made me do it!". And they'd be mostly right. Government doesn't want to indict itself.
    4 Jun 2012, 12:22 PM Reply Like
  • having a difficult time understanding the pass many are giving BOA and Ken Lewis- they lied-paid too much-almost destroyed the BOA and destroyed shareholder wealth- what was Paulson going to do if BOA walked away from the deal? These execs lied made a bad deal and then denied it-Jail is too good for them-
    4 Jun 2012, 08:33 AM Reply Like
  • The BAC-Merrill deal is a complex issue of which we may never know the full extent of who said what, who knew what when, etc.
    As a long-term shareholder and a prior employee I was very negatively impacted financially - but I agree with those who have commented that rehashing the past and piling on with more lawsuits is not solving the issues of today.
    I'm no fan of Ken Lewis - I found him arrogant and an isolationist - but we were not in his shoes when the powers that be saw another depression on the horizon. Bad judgment by executives is not illegal as of yet.
    4 Jun 2012, 09:04 AM Reply Like
  • Excellent comment. But no matter what the decision - its always bad. Always could have done better. And, investing in equities entails risk. The total risks involved are never known before the fact when disaster happens. But the mortgage melt-down was broad - - across the whole financial sector. It was zeal and moral ethic that people should be able to own the homes they live in. The bankers allowed low income people to buy homes, to finance with low rates and to not discriminate based on race nor national origin.
    4 Jun 2012, 10:12 AM Reply Like
  • I believe that Lewis was convinced by Paulson et. al. that backing out of the Merrill deal would be catastrophic for the US, and at that point stood up and saluted the flag and did what he believed was his duty to his country based on his best judgment. After all, that is what our generation was taught to do and is required to do still today. I further believe he was abandoned for political purposes. I sincerely doubt any of us writing here had as much to loose financially as Lewis did.
    4 Jun 2012, 10:36 AM Reply Like
  • Federal officials, the media, politicians continue to beat the same dead horse, attempting to deflect attention from themselves while piling on banks and bank officials. Wouldn't they (and we) be better off if those same officials burned the late night lights addressing the financial crisis of NOW?
    4 Jun 2012, 11:04 AM Reply Like
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