Merrill Losses Were Withheld Before Bank of America Deal
Source: NY Times
Days before Bank of America shareholders approved the banks $50 billion purchase of Merrill Lynch in December 2008, top bank executives were advised that losses at the investment firm would most likely hammer the combined companies earnings in the years to come. But shareholders were not told about the looming losses, which would prompt a second taxpayer bailout of $20 billion, leaving them instead to rely on rosier projections from the bank that the deal would make money relatively soon after it was completed.
What Bank of Americas top executives, including its chief executive then, Kenneth D. Lewis, knew about Merrills vast mortgage losses and when they knew it emerged in court documents filed Sunday evening in a shareholder lawsuit being heard in Federal District Court in Manhattan.
The disclosure, coming to light in private litigation, is likely to reignite concerns that federal regulators and prosecutors have not worked hard enough to hold key executives accountable for their actions during the financial crisis.
The filing in the shareholder suit included sworn testimony from Mr. Lewis in which he concedes that before Bank of America stockholders voted to approve the deal he had received loss estimates relating to the Merrill deal that were far greater than reflected in the figures that had appeared in the proxy documents filed with regulators. Shareholders rely on statements made in proxy filings to decide whether to approve transactions their companies have proposed, and companies must disclose all facts that could be meaningful for shareholders trying to decide how to vote on a deal.
Read more: http://www.nytimes.com/2012/06/04/business/bank-of-america-withheld-loss-figures-ahead-of-merrill-vote.html?pagewanted=all
msongs
(67,509 posts)naaman fletcher
(7,362 posts)and nothing will happen.
- Sometimes, it's good just having a boat.....
LiberalAndProud
(12,799 posts)-$5 billion in taxes. Does BoA they get 'refund' checks in that amount?