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Assembled in the USA from 100% Chinese parts.

History

24th April 2009

1:37pm: In the course of New York Attorney General Andrew Cuomo's investigation into last December's Bank of America - Merrill Lynch merger, Bank of America's CEO Ken Lewis has testified that then Treasury Secretary Henry Paulson threatened to remove the management and board of Bank of America if Bank of America backed out of the deal with Merrill Lynch. Secretary Paulson, in turn, said that he made the threat at the request of Federal Reserve Chairman Ben Bernanke.

Moreover, Lewis has testified that he was instructed by Secretary Paulson not to disclose the losses at Merrill Lynch that Bank of America had discovered. These losses were given as the reason Bank of America wanted to exit the deal.

Securities regulations require "material facts" to be fully disclosed in a timely manner to regulators and public stock markets.

The New York Times Dealbook blog reports denials from both Chairman Bernanke and Secretary Paulson:
Following news reports about the testimony, a spokeswoman for Mr. Bernanke said Thursday that the Fed did not advise Mr. Lewis or Bank of America on disclosure.

And a representative of Mr. Paulson said in a statement, “Questions of BofA’s disclosures were left up to Bank of America.”
Attorney General Cuomo's letter and supporting exhibits, sent to "certain overseers and regulators of TARP, the Treasury Department, and the banking industry" are at http://www.oag.state.ny.us/media_center/2009/apr/apr23a_09.html

Wall Street Journal story at http://online.wsj.com/article/SB124045610029046349.html

Edit: I just noticed that if you click through the link you only get a preview. So, here's text behind the cut.Collapse )

Update: Deal Journal interview with Yale Law School deputy dean Jonathan Macey.
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