Bank of America Lied Says New York AG

For those who had their suspicions that the Bush administration bank bailout program was nothing more than another gold rush for Wall Street, this week likely did nothing to ease those doubts. On February 4th New York Attorney General Andrew M. Cuomo and Special Inspector General for the Troubled Asset Relief Program (TARP) Neil Barofsky sued Bank of America, its former CEO Kenneth D. Lewis, and former CFO Joseph L. Price for fraud in connection with Bank of America’s merger with Merrill Lynch.

The allegations come on the heels of a settlement with the Securities and Exchange Commission who also challenged the deal. According to this most recent suit, Bank of America’s management intentionally failed to disclose massive losses at Merrill Lynch so that shareholders would vote to approve the merger. The timeline of the Merrill Lynch/Bank of America deal is important in that it acts as a snapshot of the ballooning financial crisis and illustrates the level of greed and avarice that nearly brought down the entire US financial services industry.

On September 15, 2008 Bank of America announced its plan to by Merrill Lynch and scheduled a shareholder vote to approve the transaction for December 5, 2008. By the time the approval vote was to actually happen Merrill had incurred over $16 billion in actual losses–losses known to top management at Bank of America. Not only did Lewis and others at Bank of America know about these losses, they knew more were on the way.

As directors and officers of Bank of America, Lewis and Price had fiduciary obligations to disclose this information to Bank of America shareholders before they voted on whether or not to approve a merger with Merrill Lynch. But rather than disclose this information, as required by law, they hid the losses so that the shareholders would approve the merger. Which they did.

Once the shareholder vote was secure Lewis ran to the federal government to subsidize the losses. According the the suit, Lewis then misled federal regulators by telling them that Bank of America couldn’t complete the merger without an extraordinary taxpayer bailout to cover the Merrill losses. If the government didn’t give Bank of America the money to cover the Merrill losses, Bank of America said it would walk away from the merger, citing a materially adverse change in Merrill’s financial condition as justification for abandoning the deal.

There’s only one problem for Bank of America–it knew about the Merrill losses, so to try and leverage those losses for taxpayer funds amounts to a shakedown built upon a fraud. But it worked. Bank of America ultimately received more than $20 billion in taxpayer aid.

It’s clear that had the TARP money not gone to Bank of America that the deal with Merrill Lynch would have brought the bank down. So why then push the deal unless Bank of America management knew it wouldn’t have to absorb Merrill’s losses, that it was, essentially, playing with house money? That’s exactly the question the New York suit seeks to answer.

Based on the initial evidentiary claims in the complaint, plenty of senior leaders at Bank of America knew this was a bad, and likely criminal deal. Shortly before the shareholder vote Price ignored a warning from the bank’s Corporate Treasurer, Jeffrey Brown, that he “didn’t want to be talking [about Merrill's losses] through a glass wall over a telephone. Bank management also intentionally failed to disclose to shareholders that they were allowing Merrill to pay $3.57 billion in bonuses, despite the fact that the payments were completely inconsistent with Merrill’s prior practice of paying bonuses and would come in the worst year in Merrill’s history.

According to the lawsuit, the fraud was not confined just to Bank of America shareholders. Bank management also failed to tell their own lawyers about the full extent of Merrill’s losses before the shareholder vote. In fact, once former counsel Timothy Mayopoulos learned of the losses (after the shareholder vote) he tried to confront Price but was immediately fired.

It’s worth remembering that when then Treasury Secretary Henry Paulson and the Bush administration first responded to the near total collapse of the banking system, it was with a two-page bill that would grant nearly unlimited and unchecked power to Treasury to fund institutions as it saw fit. When Congress balked at the suggestion what was born was TARP, the universally derided bank bailout program and the perfect metaphor for the ethos gripping Wall Street that is just now going challenged in these lawsuits. By allowing institutions to reap the benefit of risky decisions while forcing taxpayers to subsidize the losses is it any wonder that Wall Street continues to think its okay to pay large bonuses and refuse to extend credit to small businesses?

Read more: politics, tarp

photo courtesy of TheTruthAbout....via Flickr

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Harold M.

2:54PM PST on Feb 15, 2010

Hi Terrance, have you heard the latest about Democratic Senator Evan Bayh quitting the Senate, oops, retiring should I say from the Senate:

http://news.yahoo.com/s/afp/20100215/pl_afp/uspoliticsbayh

I wonder how many more Democratic Senators, and possibly some Democratic House members, some of them good men, will have to quit Congress before Obama and the rest of the more corrupt and stupid Congress people finally wake up to the debacle that may happen this coming November because of their weakness, their corruption, their lack of honesty and ethics, their ineffectiveness, and their lack of backbone to do the right things for the common man on the street? In a petition that I signed for Democrats.com to stop the expansion of these wars and to increase spending at home to help suffering Americans, they asked me to add a brief personal comment of my own. Unfortunately, my comment wasn't brief at all, and, unfortunately, it's way too long to post here.

send a green star

12:10PM PST on Feb 14, 2010

Yea, Terrance, that forward slash in the URL is a killer if it's in the middle of a primary address. It's only good when you are trying to add a sub-address to the primary one like the one where I added the PDF file location for PNAC. I, like you, appreciate Care2 tremendously, but it's unfortunate that both Bush & Cheney are going to get away with genocide when you add up all the people that have died so far, and how many more that will have to die, as a result of this phony war on terror for American world empire which is, in my very strong opinion, the primary motive for the 9/11 false-flag event, not to mention, as you so well put it, the destruction of our Constitution & our Bill of Rights. I'm not a religious person, not when you consider all that has happened to the human race by the human race, but I wish that a Hell does exist for people like Bush and Cheney so that, if they are not going to be held accountable by man, then at least, maybe, they will be held accountable by God, if one does actually exist. In a way I feel sorry for people like them, because, for them to do what they did, knowing full well what the consequences were going to be in terms of human life & human suffering, there is no way that either of them could believe in a God or in an afterlife where people will be judged by their actions in life. Unfortunately, for me, I see no hope in regaining our nation back as a Democracy. We have fallen into a bottomless pit.

TERRANCE N.

10:43AM PST on Feb 14, 2010

Harold-At least we can agree that 19 Arabs couldn't have pulled off 9/11, and that the 9/11 commission left out major examinations particularly on building #7. Thankfully, most Americans if polled reject the official government version.

Harold, I really enjoyed having this lengthy exchange with you and making a new friend. Whoever created Care 2 needs to be congradulated and praised.

Too bad the corporate media has not caught up with the American people on so many issues that effect us as Americans. I will look at the other sites that you posted and hopefully you will have a chance to look at those I posted. The last post I tried to list was www.rediscover911.com. not www.rediscover9/11.com.

7:16AM PST on Feb 14, 2010

Terrance, to be perfectly honest, I don't believe Israel had anything to do with the events of 9/11. I'm absolutely certain it was a Bush/Cheney show. I'm going by the evidence that I know exists beginning with PNAC, the "Plan for a New American Century." I give to you the following links:

The PNAC Homepage:
http://www.newamericancentury.org/

The PDF File titled "Rebuilding America's Defenses:"
http://www.newamericancentury.org/RebuildingAmericasDefenses.pdf

Press Ctrl-F to open up a word search window and enter "Pearl Harbor" and then "Enter." It will take you to page 51 of the document. Read the upper-left-hand paragraph:

The Statement of Principles Page:
http://www.newamericancentury.org/statementofprinciples.htm

Scroll to the bottom and read the Signatories.

Then I suggest that you return to the PNAC homepage and peruse everything else when you have the time.

Then when you add the films "911 In Plane Site" and "911 Ripple Effect" along with the following websites, and the fact that Bldg 7 came down without anything hitting it, only the Bush admin could have done it all:

http://en.wikipedia.org/wiki/World_Trade_Center#Structural_design

HQ Pentagon Damage Photos:
http://911research.wtc7.net/pentagon/evidence/photos/index.html

Fake Bin Laden Confession:
http://whatreallyhappened.com/WRHARTICLES/osamatape.html

http://www.npr.org/news/specials/response/investigation/011213.binladen.tape.html

And there's a whole lot more evidence

3:20PM PST on Feb 13, 2010

Harold- Thats www.freedocumentaries.org not .com.

3:18PM PST on Feb 13, 2010

Harold-I veiwed "9/11 ripple effects" and agree the government conspiracy theory has been debunked. I feel it is necessary to get into the particulars of motive and who had the most to gain from 9/11, and what elements has gained the most from 9/11.

The Bush administration was able to suspend the constitution, and start a war that reaped billions from our treasury in military expenditures to groups like Haliburton and Black water.

Israel benefitted from the fact that one of its worst enemies, Iraq was attacked; something Israel wanted for a long time. This also sets the stage for an attacks on other Arab countries, particularly Iraq.

Take a look at www.freedocumentaries.com. Scroll down and start with "peace, propaganda, and the promised land". There was another insightful documentaries at www.rediscover9/11.com. I think this was somehow removed because it implicated Israel with devastating evidence. I call this "techno terrorism".

7:03AM PST on Feb 13, 2010

Terrance N, I fully agree with you about 9/11. I'm absolutely certain, 100% certain, that 19 hijackers with boxcutters did not commit the attacks of 9/11, that the so-called individuals who confessed to planning the crime, people like Khalid Sheikh Mohamed, confessed under torture, and that magical film that Bush claimed was found somewhere in Afghanistan which allegedly shows Osama Bin Laden in a tent with his fellow compatriots approving of the attack and its results was as phony as those papers from Niger accusing Saddam Hussein of attempting to obtain fissionable material for a nuclear bomb. The individual playing Bin Laden looked nothing like him at all.

As far as the Iraqi casualties are concerned as a result of the illegal attacks on their country, I think that you're slightly off the mark. In 2008, John Hopkins Institute ran a scientific survey to determine how many Iraqis died as a result of the U.S. invasion of Iraq, they came up with approximately 1300 thousand, and that was in 2008, not including the 4 million plus Iraqis who are now homeless. How many more Iraqis have died since? And, now we're doing the very same thing in Afghanistan (and Pakistan), and for what? A lie, a phony attack on 9/11 that was completely perpetrated by the Bush administration. I wish that every American would watch the film titled "9-11 Ripple Effect." The video has distilled all of the video and photographic evidence down to its purest essence.

8:38PM PST on Feb 12, 2010

Harold-Since we're talking about murder, how about the greatest murder in the United States history, the murder of three thousand Americans on September 11, 2001, that the government conspiracy theorist say 18 arabs committed by infiltrating the most secure govermental, military, and security aparatus ever in the history of the world. They expect us to believe this fantasy.

No other country or group had the opportunity, the access, or technological knownlege to pull this off with the exception of maybe our illustrious friend, Israel.

Three thousand Americans where murdered on that day, and subsequently another hundred of thousand Iraqi's kiiled, injured, and displaced. Not to mention the additional thousand of American soldiers killed and wounded.

All based on lies that Iraq had weapons of mass destruction. Then another thousand Americans where murdered during Katrina.

These people are like serial killers. The more they commit these crimes, the better they get at it, and the more crimes they want to commit. Who knows when the next crime will take place?

We are all going to die one day. We don't know how, when, or where it will happen. What galls me is that these killers would put themselves in the place of God and decide who is to die, when they are to die, and where people are to die.

6:34PM PST on Feb 12, 2010

Terrance N, I know that you used the word "others" in your sentence listing people that have been assassinated by our government because they were a danger to destroying the established system. I would also like to mention a few myself. I know that they had their faults as well, but I would like to mention JFK who was actually planning on ending the war in Vietnam by 1964, his brother Robert Kennedy, and one that just recently happened in 2002, Senator Paul Wellstone of Minnesota. Out of all the Democratic Senators at the time, and even today, he had a true backbone. Instead of constantly complaining about what the Republicans were doing as well as some of his fellow Democrats, as Kucinich does, Wellstone became a proverbial thorn in Bush's backside. Wellstone's airplane crash just two weeks before the 2002 midterm elections was no accident. It was an assassination. If he would have won his seat in the Senate, the Democrats would have had a majority. Whoever murdered him and his whole family made sure that they didn't make the same mistake they made when they killed another Democratic politician from Arkansas when they left his wife alive and she ran in his place and won. They made sure that when Paul Wellstone died, that his wife went with him. How does one win against cold-blooded killers like this? Corporations and many politicians don't care who has to die in order to maintain their power.

12:12PM PST on Feb 12, 2010

Harold M. You paint a very dreary picture of our current political situation in this country. I can't say that I blame you.

My premise however is not that politicians are going to do the right thing. I'm only pointing out things that they are supposed to do as our elected representatives. I am under no illusions of their current behavior, which is on the whole duplicitist, greedy, and talking out of both sides of their mouths.

Our last revolution in this country took place in the 60's. The FBI, CIA, B.O.S.S, other intelligent agencies showed how ruthless they can be. King, Kennedy's, Malcolm X, Lennon, and countless others paid the price. Those leaders mentioned are gone. Where are the people that removed them? They waiting, monitoring, easedropping, and spying on potential leaders to eliminate.

We have the numbers. What we need is the intelligence, committment, courage, endurance, to create a system worthy of living in. I think the people can and will do this.

Why, because the current system in which we pollute the environment, make our fellow man homeless, create weapons of mass detruction, poison our foods, and economically devastate ourselves and countries worldwide is not sustainable. Who is going to rescue our present system? Not Obama for sure. The economic devastation is all around us. It must be replaced by something. We the people can start by not participating in the madness. That's where people like you, me, and the rest of us come in Harold.