New York AG Goes After Bank of America

[RamboLiberal]

Source: CBS News/AP

The New York Attorney General's office is filing civil charges against Bank of America and its former CEO Ken Lewis, saying the bank misled investors about Merrill Lynch when it acquired the Wall Street bank in late 2008.

Civil charges were also being filed against Joe Price, the bank's former chief financial officer.

Lewis stepped down from Bank of America on Dec. 31 after almost a year of strife that followed the bank's purchase of Merrill Lynch.

Bank of America has been accused of failing to properly disclose losses at Merrill and bonuses paid to investment bank employees before the deal closed.

"This merger is a classic example of how the actions of our nation's largest financial institutions led to the near-collapse of our financial system," said Attorney General Andrew Cuomo.


Read more: http://www.cbsnews.com/stories/2010/02/04/business/main6173784.shtml?tag=breakingnews

[gateley]

1. K&R! nt

[tomm2thumbs]

2. away to the greatest page with ya!

[skyounkin]

3. CBS news headling tomorrow

New York Attorney General found in bed with call girl #10.

[tomm2thumbs]

4. #10 aka Giuliani ?

[RoccoR5955]

21. Don't you mean Ghouliani?

[tomm2thumbs]

55. that's a great shot - never seen it before /nt

[No Elephants]

40. I thought it was supposed to be pretty in pink?

[Enthusiast]

47. It could happen.

Or something similar.

[pjt7]

5. NY never goes after it's own financial criminas

BOA is in NC.

[MessiahRp]

6. I'm glad the NY AG office never put down the anti-corruption torch that the Spitzer AG Office had

In many ways the NY AG office is working as the US AG office going after the corrupt corporations the US DOJ doesn't seem to have the balls to go after. Thank goodness someone is doing to work of the people and trying to keep these crooks in line.

Rp

[Ignis]

16. +1

It's nice to see that they weren't cowed by the Spitzer witchhunt.

:patriot:

[truedelphi]

17. Ah, but had Spitzer kept his fly shut, these investigations might have

Occurred a year or more earlier. Which is key, when investigations are following such huge financial firms and their dealings.

Also, wasn't Bank of America forced into the merger? By Bernanke or Paulson?

[bertman]

30. Spitzer made a big mistake and has paid for it dearly. Why bring that up? It's over

and done.

[unc70]

46. Mostly driven by NY politics and race for governor

This is typical of high-profile cases motivated in part by the desire for higher elective office and attempts to establish ones image as a populist anti-corrouption rep of the people.

Notice that it is NC-based BofA being targeted, not anyone in NY whether ML, FedReserve, or any of the investment houses located in NYC.

Notice that these charges in NY were announced the same day as was the settlement of shareholder claims against BofA that was reached with the State of NC and with Federal authorities.

Note also that some of those controlling large blocks of BofA shares were the same institutions reaping huge profits by shorting BofA and driving down share prices, while causing large financial losses to the very share owners who had entrusted fiduciary with them.

[MessiahRp]

51. Who cares where they are located?

Sounds like a weak argument to defend these corrupt banks to me. NY customers most likely were defrauded by their practices so it is in the NY AG's interest to go after someone defrauding their state's citizens. It's no different than going after NC Tobacco companies for the damage they did to smokers in all of the different states that forced a huge settlement out of them.

Or were you against that too?

Rp

[unc70]

53. Appears to confront Wall Street/Banks, but those powerful in NY

Unless I see similar actions by NY AG against some very powerful people and firms located in NY, I see no evidence this is anthing more than for show. Going after Lewis and BofA on the disclosure issue poses no actual risk to any of various powerful interest involved, particularly if it is ultimately "resolved" by settlement which NY is able to spin as a win, while limiting the public inquiry of actions by Paulson, Berneke, or those at NYC-based investment banks, hedge funds, etc.

Actually going after any of those too-powerful-to-indict would be political suicide. It could also bring a huge economic meltdown to NYC and a crippling loss of tax revenue to NYC and the State of NY. I am certain these were significant influences on many of the decisions and actions over the last couple of years. Just as the actual beneficiaries of the AIG bailout were other firms, particularly GS, I find the insistance on the acquisistion of ML by BofA and payment of the ML bonus package at such high levels (using bailout money) and resultant public outrage meant that these payments were extremely important to some very powerful people or groups.

I think it goes beyond just the money and its impact, possibly including the coverup of criminal activity at ML and related parties that would likely have been exposed by the failure and bankruptcy of ML. Much easier to hide such things after a merger/acquisition and ensuing pooling and restatement of all financials, with writedowns of assets, provisions for losses, and all those confusing notes attached to financial states for the next few periods. This course of action gave those at ML time to unwind positions that otherwise would be large loses.

I will be surprised to see anyone reporting on these issues, ever. Remember that the SEC and the NC AG have reached a settlement with BofA that includes compensation to BofA shareholders resulting from any less-than-full disclosure.

Finally, I am unsure what was the proper course for Lewis and BofA. Several large acquisitions had brought many problems, diluting the corporate culture and exposing the board to demands on quarterly returns by Wall Street money managers, etc. By the time the ML acquisition was "suggested" to BofA, BofA itself was already under attack by powerful groups attempting a hostile takeover. These attacks used shortselling, rumours, planted news stories, and other takeover techniques to gain large short term gains by driving down share prices, while destroying shareholder values and equity.

With BofA shares already down to about $3 and would be worthless if the regulators were to intervene by a takeover of its operations and assets and then "giving" them to one or more competing institutions. The Fed "threat" to remove and replace the board and management with more-experienced bankers(!) and resistance to this by Lewis, et al, was framed as them selfishly trying to keep their high-paying jobs while others were losing their jobs, savings, and homes.

With shares prices for BofA now around $15, did Lewis and the BofA board violate their fiduciary responsibilities to share holders, to clients, to bondholders, and the community at large?

At this point, I see their actions related to disclosures and the ML acquisition as being among the "least worse" courses.

[EnviroBat]

7. Cool! I just had my mortgage removed from their service too!

Screw BOA, I hope they go down the toilet.

[Amerigo Vespucci]

8. K&R

:patriot:

[spotbird]

9. Why is this a civil complaint?

And not criminal?

[grahamhgreen]

13. +1

[activa8tr]

24. Because rich people are so civil. LOL Seriously, fraud to me is

always a crime, and I don't know why these guys should be found guilty and go to jail for many many years.

[Veronica.Franco]

32. Because in criminal court ...

they'd have to prove criminal intent ... that they maliciously misled ... while in civil court they can seek damages ... MONEY ... without the burden of proving them criminal ...

[No Elephants]

41. Proof beyond a reasonable doubt v. preponderance of the evidence may have something to do

with it, too.

[Veronica.Franco]

49. The needless Echo of the Elephant ...

Again .... sheesh ... I've only been back over here a short time and I've seen your mindless wandering ... wow, whooo hoooo! ... BLOCK ...

[Jefferson23]

10. Here's hoping against hope, K&R for justice!

[Vidar]

11. Bravo AG Cuomo!

[Ecumenist]

12. HOT DOG, HALLELUYAH AND GOODY-GOODY!!

I HATE BOA. Had my mortgage sold to them and have been harrassed about being behind when I've made the payment and more each month.

[CoffeeCat]

22. How can they do that?

That's kind of scary. You're making on-time payments, plus extra--and they're asserting that you
are behind in your payments?

How did they defend that?

I'd keep all records and receipts if I were you.

[Selena Harris]

38. BOA constrictor

Just keep squeezin the life outta ya!

[Ecumenist]

39. They claim that the problem is a glitch with the computer ...like I believe that.

The collections department is in "BLOODY INDIA"!! and the records aren't automatically updated for the collections. We actually sent in an extra payment at the end of the year and these idiots just parked it and didn't post it to our payment. We had to call them and get "country" with them before they would straighten the issues out. As for the records and receipts, you bet your sweet bippy we keep everything and also record the names and extensions of the people we talk to.

[katty]

14. great!!

[mbperrin]

15. More, please.

Please go after more banks after this.

[TheWatcher]

18. Good Show. Now assuming this isn't a "show" or more theater to put the herd to sleep

Let's hope that the NYAG Has NO Skeletons in his closet, is more squeaky clean than a sterilized lab, and doesn't have the need to climb aboard any small planes in the next few months, and he doesn't make the headlines with a live boy or a dead girl.

Because if this is real, he just walked up to a lion and smacked it in the mouth.

These bastards NEED to be brought down, but I hope he has a full understanding of what he's up against.

[NikolaC]

28. He has gone up against the big banks

and Wall Street before. He has also sued Intel.

[TheWatcher]

45. Excellent.

Appreciate the links.

Let's see how this pans out.

Justice is NOT impossible, even in a country that no longer really has a Rule Of Law, although it is improbable.

BUT, that does mean it still has an opportunity.

We HAVE to start somewhere.

[NikolaC]

50. Exactly

I believe that his office works hard for consumers (this comes from my own personal experience). New York is lucky to have them.

[progressoid]

19. Hmmm, should we give them a slap on the wrist or a severe scolding.

Even a multi million dollar fine won't mean shit to these theives. That's just a drop in the ocean to them.

[RoccoR5955]

20. WTG for the future governor of the great Empire State!

Yep, another Cuomo is running. He's still doing his AG job well though. Maybe Spitzer can run for Andrew's old office.

[No Elephants]

42. I think his ultimate goal is the Oval Office, after Albany.

[David Zephyr]

23. Ken Lewis needs to spill the beans on Hank Paulson.

.

[girl gone mad]

25. About time. Paulson and Geithner should be next.

[cactusfractal]

26. Good. And

FUCK BofA. From the bonus-laden execs on down to the smarmy bitches who decide whether your two-hour deposit lapse nets the bank $70 or not. (It does.) I wouldn't piss on a BofA employee if they were on fire.

[BlueCollar]

27. Good

BofA sux.

[laylah]

29. ...

http://www.youtube.com/watch?v=nnHksDFHTQI

[bertman]

31. Great news. K & R. nt

[pleah]

33. K&R

[valerief]

34. So will this go all the way the Supreme Court and get dismissed? nt

[No Elephants]

43. Only if someone has a claim under the Constitution of the United States.

Then again, I'm sure BIA's lawyers can make one up in order to make it to corporate heaven.

[varelse]

35. It's about fucking time

too bad we cannot try them for high treason. :(

[FreakinDJ]

36. Long over due

[defendandprotect]

37. K&R

[ddeclue]

44. SOMEONE needs to take down the BoFUA. nt

[panzerfaust]

48. Guess the baksheesh was ungenerous

next time they will do better by the AG

[Shining Jack]

52. K&R

D'oh !Cant't R !

[leftrightwingnut]

54. Kick! Excellent news!