Lewis Testifies U.S. Urged Silence on Deal

Discussion in 'Wall St. News' started by ASusilovic, Apr 23, 2009.

  1. 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.

    Mr. Lewis, testifying under oath before New York's attorney general in February, told prosecutors that he believed Messrs. Paulson and Bernanke were instructing him to keep silent about deepening financial difficulties at Merrill, the struggling brokerage giant. As part of his testimony, a transcript of which was reviewed by The Wall Street Journal, Mr. Lewis said the government wanted him to keep quiet while the two sides negotiated government funding to help BofA absorb Merrill and its huge losses.

    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.

    Q: Were you instructed not to tell your shareholders what the transaction was going to be?

    A: I was instructed that 'We do not want a public disclosure.'

    Q: Who said that to you?

    A: Paulson...

    Q: Had it been up to you would you [have] made the disclosure?

    A: It wasn't up to me.

    Q: Had it been up to you.

    A: It wasn't.

  2. WOW, just a slight glimpse into the massive corruption/fraud going on at all levels, including at the top.

    This country has lost its moral fiber and is on the road to hell.
  3. there msut be executions for corruption like in CHINA, they even put governors of provinces to death there for stuff like that
  4. eagle


    What will happen if Merrill Lynch went bankrupted? IMO, it's like the Wall Street's artery had been cut. But I don't agree that Merrill Lynch was worth $50B to BAC, should be less.
  5. This out on the tapes...
  6. CET


    You cannot trust anything Lewis or the Gov. says. Wasted time.
  7. This is a diversion!
    Keep your head in the game!

    "Strange things are afoot at the Circle K."
    ~Ted "Theodore" Logan

  8. It's quit clear based on the past, the Fed can not and should not be trusted.

    It's there supervisions that have caused every single one of these catastrophes.

    If you didn't know BAC was pressured to buy that turd MER, then you are for sure, 2 dumb to trade. Move along, you're blocking traffic.

    Probably 2 dumb to breath , but we'll be kind.
  10. jem


    this is most likely truthful disinformation.

    If you notice that JPM was "forced to buy" a troubled asset.

    And now BOFA was too.

    Why? I am sure it is to cover up how upside down bofa is.

    BofA owns a lot of its loans.

    There assets are probably worth 30-50% of what they are marking them.

    can you imagine broke BofA truly is?

    it was one of the biggest lenders to CA the last 5 years. Florida too. A wholesaler said BofA kept most if not all of their loans.
    #10     Apr 23, 2009