Posted on 04/23/2009 7:29:59 AM PDT by schu
Federal Reserve Chairman Ben Bernanke and then-Treasury Department chief Henry Paulson pressured Bank of America Corp. to not discuss its increasingly troubled plan to buy Merrill Lynch & Co. -- a deal that later triggered a government bailout of BofA -- according to testimony by Kenneth Lewis, the bank's chief executive.
(Excerpt) Read more at online.wsj.com ...
In the transcript reviewed by the Journal, Mr. Lewis didn't say he was explicitly instructed to keep silent about the losses piling up at Merrill. But his testimony indicates that he believed the government wanted him to remain silent.
Will we ever know the truth? I get more angry by the day .... schu
Hank Paulson probably has a “get out of jail free” letter signed (by Bush) and sealed in a safe place.
... 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.
Isn't this extortion? sschu
The liberals will use Paulson/Bernanke every time someone goes after Obama and his minions regarding the economy.
One day, Obama is going to rip off his mask and.....its Geroge W Bush....
Seems the only difference between Obushma and Bushbama is that Obama likes Islamic Terrorists just a little bit more...
ask by who, in the US Govt?
This is hardball, CEO style. How do you think Goldman Sachs has come to de facto, control the US? And why was it so imperative that Paulson’s mini-me Geithner HAD to be the next Treasury Secretary?
“It’s not personal, Fredo, it’s only business. And Fredo, don’t ever take sides against the family again””
“I can't recall if he said, ‘We would remove the board and management if you called it [off]’ or if he said ‘we would do it if you intended to.’ I don't remember which one it was,” Mr. Lewis said. “I said, ‘Hank, let's de-escalate this for a while. Let me talk to our board.’ “
Paulson with Bernanke’s support strong armed BoA to eat the Merrill disaster.
schu
I wonder what else is out there and now we know why they will not tell us where the TARP funds went.
schu
TARP SCHMARP
Before TARP- TWO TRILLION disappeared that has yet to be accounted for.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aatlky_cH.tY&refer=worldwide
Someone’s going to jail? Surely you jest.
even at the time,
it seemed that bofa buying both
merrill lynch and countrywide
was a bit much.
Paulson and Bernanke: Indictment Time?
http://market-ticker.org/archives/982-Paulson-and-Bernanke-Indictment-Time.html
Hoh hoh hoh - Christmas in April?
Federal Reserve Chairman Ben Bernanke and then-Treasury Department chief Henry Paulson pressured Bank of America Corp. to not discuss its increasingly troubled plan to buy Merrill Lynch & Co. — a deal that later triggered a government bailout of BofA — according to testimony by Kenneth Lewis, the bank’s chief executive.
Ah, but here’s the rub:
Under normal circumstances, banks must alert their shareholders of any materially significant financial hits. But these weren’t normal times: Late last year, Wall Street was crumbling and BofA faced intense government pressure to buy Merrill to keep the crisis from spreading. Disclosing losses at Merrill — which eventually totaled $15.84 billion for the fourth quarter — could have given BofA’s shareholders an opportunity to stop the deal and let Merrill collapse instead.
“Isn’t that something that any shareholder at Bank of America...would want to know?” Mr. Lewis was asked by a representative of New York’s attorney general, Andrew Cuomo, according to the transcript.
“It wasn’t up to me,” Mr. Lewis said. The BofA chief said he was told by Messrs. Bernanke and Paulson that the deal needed to be completed, otherwise it would “impose a big risk to the financial system” of the U.S. as a whole.
Uh, its not under “normal circumstances”, it is under all circumstances.
Your first obligation isn’t to your regulator, it is your fiduciary responsibility to your share and bondholders.
If your regulator decides to remove you from office as a consequence, they do. That doesn’t change a thing; your personal interests cannot override your responsibilities.
As the CEO of a public firm you don’t work for the govermment, whether you think you’re some “left arm adjunct” or not. You work for the holders of your stock and debt - period. On this matter the law is clear, and the government, even post-TARP, had a minority stake.
As such they lack standing to tell you to shut up when your obligation to disclose is a matter of black-letter law.
We are a nation of laws, not of men. Paulson never left Goldman Sachs in his view of what his position at Treasury entailed - as CEO of a firm you can push people around under you, if you want, and you live or die by whether your decisions prove correct in the fullness of time. As a former CEO I know how this works - I made some very unpopular decisions from time to time, but those decisions were made in the best interest of all the shareholders (of which I was the largest one) - because they own the company and my job is to manage it in their interest.
While running to The Press (or simply blasting Paulson publicly when he attempted to pull this) would have inevitably led to an interesting set of confrontations, the fact remains that Mr. Lewis is not beholden to the government - he is beholden to shareholder and bondholder interests as a matter of law and the law on disclosure duties is a black-letter thing.
Here’s hoping Cuomo doesn’t table this issue but rather sees it through to its logical conclusion.
Conspiring to do an unlawful thing is frequently unlawful in and of itself.
Oligarchs, all of them...
Too bad the ENRON execs didn’t think of this defense... “Hey, these aren’t normal times...”
Isn't it interesting how, on February 13th, 2009, the eve of the St. Valentines Day Massacre, the United States government busted Swiss chops and destroyed Swiss banking secrecy laws? I'd be looking in Switzerland for the dough, if I was YOU!
Not when it is the government trying to make the world better....
A spokeswoman for Mr. Bernanke said, “No one at the Federal Reserve advised Ken Lewis or Bank of America on any questions of disclosure.”
“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,” she said.
I wonder who it is?
schu
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