BofA Chief Testifies U.S. Urged Silence on Merrill Deal

saltyone · Apr 23, 2009

I wonder how many other back room deals were worked out in order to enact socialism. This is inexcusable...Let the lawsuits begin. This has to be a violation of every conceivable business ethics law on the books. The government isn't worried though...they'll just use more our tax money to pay out the suits.

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.

"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.

Mr. Lewis's testimony suggests how aggressively federal regulators have been willing to behave in their fight to fix the U.S. financial system.

The testimony for the first time spreads some of the blame to Messrs. Paulson and Bernanke for Mr. Lewis's decision to keep problems at Merrill under wraps.
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http://www.foxnews.com/politics/2009/04/23/bofa-chief-testifies-urged-silence-merrill-deal/

I wonder what this man feared? Or...was it something he knew that caused someone else to fear him?

Acting CFO of Freddie Mac Found Dead

David Kellermann, the acting chief financial officer of Freddie Mac, was found dead at his home Wednesday morning in what broadcast reports said was an apparent suicide.

WUSA-TV and WTOP Radio reported that David Kellermann was found dead in his Northern Virginia home. The 41-year-old Kellermann has been Freddie Mac’s chief financial officer since September.

McLean, Va.-based Freddie Mac and sibling company Fannie Mae, which together own or back more than half of the home mortgages in the country, have been hobbled by skyrocketing loan defaults and have received about $60 billion in combined federal aid.

Mr. Kellermann was named acting chief financial officer in September 2008, after the resignation of Anthony “Buddy” Piszel, who stepped down after the September 2008 government takeover. The chief financial officer is responsible for the company’s financial controls, financial reporting and oversight of the company’s budget and financial planning.
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gumborue · Apr 23, 2009

pretty serious offense if true.

my main question is--what authority did bernanke and paulson have over this guy? seems like they had to threaten some action. are you insinuating that they had the freddie mac chief killed?

mobius481 · Apr 23, 2009

I wish there were more specifics. Lewis "believing that paulson and bernanke were instructing him to be quiet" could mean a lot of things. I wonder what they actually said or did. There's a fine line between trying to talk someone into doing something and putting "illegal" pressure on them. Just wish the story was less vague.

red55 · Apr 23, 2009

Add another mysterious death to the Bill and Hillary Body Count. Will these fiends never be caught and punished for their heinous crimes? :rolleye33:

saltyone · Apr 23, 2009

red55 said: ↑

Add another mysterious death to the Bill and Hillary Body Count. Will these fiends never be caught and punished for their heinous crimes? :rolleye33:
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And your opinion of the BofA shareholders being racked over the coals by the federal government would be...?

red55 · Apr 23, 2009

saltyone said: ↑

And your opinion of the BofA shareholders being racked over the coals by the federal government would be...?
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Did you lose your sense of smart-assity, amigo? It was a facetious remark implying that it was a huge leap between the BofA story and the Freddie Mac suicide.

It's really no fun making cynical observations if I have to explain them to you. :wink:

gumborue · Apr 23, 2009

paulson throws bernanke under the bus; backs lewis's testimony

Paulson Throws Bernanke Under the Bus, Backs Ken Lewis -- Seeking Alpha

lewis is already toast.

bernanke may be next.

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BofA Chief Testifies U.S. Urged Silence on Merrill Deal

saltyone So Mote It Be

gumborue Throwin Ched

mobius481 Registered Member

red55 curmudgeon Staff Member

saltyone So Mote It Be

red55 curmudgeon Staff Member

gumborue Throwin Ched

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