Bank Of America Board Members Subpoenaed
New York Attorney General Andrew Cuomo's office is gathering information in order to file fraud charges against some BoA executives over what they knew, and what they hid, when they acquired Merrill Lynch & Co. a year ago. Earlier this week, his office subpoenaed 5 board members to find out "what they knew regarding the mounting losses and bonus payments at Merrill before the deal closed on Jan. 1 and what role they played in deciding whether to disclose that information to shareholders," according to the Associated Press.
When BoA's CEO Kenneth Lewis fired Merrill Lynch's CEO John Thain this past January, it was because Thain had allegedly fast-tracked bonuses for employees without BoA's knowledge or approval, and had withheld the true amount of losses that Merrill Lynch faced for 2008 (a record $27.6 billion ultimately). Thain, who spoke yesterday at Wharton Business School in Pennsylvania, says that wasn't true at all:
Thain said he didn't speed up the bonuses and Charlotte, North Carolina-based Bank of America shouldn't have been surprised by the fourth-quarter loss .
"When I got fired in January and they said ‘John Thain secretly accelerated these bonuses,' they were lying," Thain said. "And that has now trapped them into a lot of trouble, because there is a document that says yes, in fact, they agreed to this in September."
Thain also joked that if he had to redecorate that office again, he would have gone with IKEA, which would have been genuinely funny if he at all meant it.
Cuomo's office is also investigating whether federal regulators pressured BoA into completing the deal whether they knew about Merrill Lynch's huge losses or not, which is what BoA executives have said.
"NY AG Subpoenas 5 BofA Board Members" [ABC News]
"Thain Says He Should Have Picked Ikea Furniture for Merrill" [Bloomberg]
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(Photo: mrkathicka)
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Comments:
This makes me feel YAY!
Mr. Cuomo, I'd recomend golf shoes for the sack kicking you'll be doing. Makes things more "memorable" for those on the recieving end.
@bloggerX:
The Attorney General, Eric Holder's position, is not an elected position either. US Attorneys and Attorney Generals are presidential appointments.
I can't quite put my finger on it, but something about Andrew Cuomo really bothers me. For some reason I just don't feel like he's genuine and that all of the actions he takes are motivated purely by a desire to move up the political ladder.
If what is printed in the Charlotte Observer is at all believable, BofA tried to back out of the deal, but the Fed made them complete the deal
@bloggerX: But in the make believe world where people who would actually make a difference are in positions of power, I would give my vote for Cuomo for the AG too.
@Esquire99: Wait, wait, wait..... wait..... just a second. Someone working hard at they're job only to to further their own career? That's total bullshit, I don't believe that for a second.
@Esquire99: Who cares as long as he is protecting consumers and other entities? If elected officials are not motivated by political desires (making constituents happy) than they are motivated by corporations. At least he is on the right side (unlike congress).
@gStein:
Wow, where have you been? BofA has been saying for a LONG time that they tried to invoke the MAC clause of their deal agreement, but the Fed/Treasury threatened to make things difficult for them if they did. Congress has held hearings on this (back in June/July) and it was all over the news for quite some time.
@deejmer:
But who is he protecting? At best, BOA shareholders. I'm not sure spending government money protecting them is the best use of time/money. And given the claims that the Fed pressured BOA into buying Merrill, shareholders might be better off than if the Feds were all up in them.
I think he just figures people will see the "Cuomo takes on BOA" and not read the details, and be like "Good, banks suck!"
@Esquire99: It must be irksome when your "Corporations Can Do No Wrong" rear-ends "These Crooks Got Rich Destroyed the Global Economy and Stole Half My Retirement".
I know: let's displace that uncomfortable feeling by blaming the people trying to expose this and make them accountable!
@Trai_Dep:
Just because Cuomo's a complete opportunist only out for his own self-aggrandizement and personal ambition doesn't mean he's not right about this, after all.
Mr. Cuomo, if you ever decide to run for U.S. Attorney, you have my vote.