Posted on 04/24/2009 5:45:22 AM PDT by SeekAndFind
No one at the Federal Reserve advised Bank of America chief Kenneth Lewis on any disclosure issues, Fed spokeswoman Michelle Smith said on Thursday.
"No one at the Federal Reserve advised Ken Lewis or Bank of America on any questions of disclosure," Smith said in an e-mail responding to a question. "It has long been the Federal Reserve's view that questions of this nature are best addressed by individual institutions and their legal counsel, as they are in a position to understand clearly their obligations and responsibilities."
New York Attorney General Andrew Cuomo said on Thursday that Lewis was pressured by senior federal officials Henry Paulson and Ben Bernanke to accept a merger with troubled Merrill Lynch or lose his job.
The government helped orchestrate the acquisition of the investment bank by Bank of America over the same weekend in September that another investment bank, Lehman Brothers, went under, setting off one of the most intense periods of the financial crisis.
Bank of America acquired New York-based Merrill Lynch on Jan. 1.
Meanwhile, a spokesman for Paulson said he was delivering his own message, and not the Federal Reserve's, when he told Lewis that the bank was in a binding merger contract with Merrill Lynch.
"Secretary Paulson's words were his own," the spokesman said. "(Fed) Chairman (Ben) Bernanke did not instruct him to indicate any specific action the Fed might take," the spokesman for Paulson said in a statement.
Bank of America has repeatedly defended its purchase to shareholders and investors amid revelations of huge losses at Merrill Lynch before completion of the deal.
"We believe we acted legally and appropriately with regard to the Merrill Lynch transaction," Bank of America spokesman Scott Silvestri said on Thursday.
Representatives from the Treasury Department had no immediate comment.
(Excerpt) Read more at cnbc.com ...
See here :
"Lewis has admitted in recent months that he had trepidations about completing the purchase of Merrill Lynch. In December, just before it was sold to Charlotte, N.C.-based Bank of America, Merrill Lynch said it lost more than $15 billion in the fourth quarter.
According to the testimony, Lewis had several discussions with government officials over his concerns about the deal, including his desire to scuttle it. Purchase deals typically allow companies to back out if there are significant changes in operations or performance.
But Secretary Paulson advised Lewis in late December that if Bank of America terminated the deal, the company's management and board would be replaced.
Lewis told the attorney's general's office during his testimony that Secretary Paulson said to him: "I'm going to be very blunt, we're very supportive on Bank of America and we want to be of help, but ... we would remove the board and management if you called it."
Just a few weeks after the deal was completed, Bank of America's fourth-quarter earnings report showed the major hit its balance sheet took on the Merrill Lynch transaction, making Lewis the target of much shareholder fury. In January, Bank of America reported a $2.39 billion fourth-quarter loss.
Two of the nation's largest state pension funds are seeking to lead a class action lawsuit against Bank of America, alleging the bank's management "misstated or omitted" important information about Merrill Lynch's financial health before the deal was completed."
Bernanke is lawyering up?
Chairman Bernanke needs to go under oath, on camera.
Now some how there has to be a ‘road’ project started to get campaign contributions flowing out side the bank books.
I’ve asked this question before.
My question has not been satisfactorily answered -— CAN A BANK REFUSE TARP MONEY ?
Is it legal for the Fed or the Treasury to force banks to accept TARP money or even to acquire a failing institution like Merrill Lynch ?
What if a brave bank went to court to fight the pressure ? Will they win ? I believe they would.
Anyone ?
Did they just leave a horse head in his bed?
Put Paulson and Bernanke under oath in front of a grand jury and ask them.
I do not know. And I have yet to hear/read of any banking institution successfully rejecting TARP money. I have not heard/read that anyone of these financial institutions have gone to court to fight being forced to take the TARP dollars.
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