Towns and Kucinich to Hold Fourth BofA – Merrill Lynch Hearing

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http://oversight.house.gov/story.asp?ID=2641

"Washington, DC – Chairman Edolphus “Ed” Towns (D-NY) and Subcommittee Chairman Dennis Kucinich (D-OH) announced last week that the House Oversight and Government Reform Committee will continue its investigation into the Bank of America (BoA) – Merrill Lynch merger on Thursday, October 22, 2009, with a hearing entitled “Bank of America and Merrill Lynch: How Did a Private Deal Turn Into a Federal Bailout? Part IV.”

Earlier this year, Chairmen Towns and Kucinich launched an investigation into the events surrounding the Bank of America – Merrill Lynch merger. The Committee previously received testimony from Bank of America CEO Kenneth Lewis, Federal Reserve Board Chairman Ben Bernanke and former Treasury Secretary Henry Paulson. On June 9, 2009, Chairman Towns subpoenaed internal e-mail communications and other documents from the Federal Reserve."

The witnesses scheduled to testify include:

The Honorable Mary L. Schapiro
Chairman
Securities and Exchange Commission

The Honorable Sheila C. Bair
Chairman
Federal Deposit Insurance Corporation

Mr. Christopher Cox
Former Chairman
Securities and Exchange Commission

Mr. Timothy J. Mayopolous
General Counsel
Bank of America (until December 10, 2009)

Mr. Charles “Chad” Gifford
Member
Bank of America Board of Directors

Mr. Thomas J. May
Member
Bank of America Board of Directors

[flvegan]

1. Sweet. K&R

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4. Thanks :) n/t

[slipslidingaway]

2. "...I think Kenny has some ’splainin to do! ..."

http://www.ritholtz.com/blog/2009/10/bank-america-merrill-merger-emails-read-and-weep-what-a-disaster/

"Some of the emails that recently came to light — from prior to the Merrill acquisition closing — makes it pretty hard for the company to claim MAC — Material Adverse Condition. The email exchanges make clear it they had a pretty good idea about the lousy condition Merrill Lynch was in. To my read, it looks like they got cold feet once they realized they bid too much too soon.

I think Kenny has some ’splainin to do!

“Congressional investigators think that reams of internal documents turned over by Bank of America last Friday show that its executives were alarmed by mounting losses at Merrill Lynch well before shareholders voted to approve the merger, according to sources familiar with the matter.

Investigators also think the documents, combined with prior testimony and fresh interviews with a key executive, suggest that Bank of America chief executive Kenneth D. Lewis used the threat of backing out of the government-backed deal as leverage for billions more in taxpayer bailout money, the sources said.”

The lawyers are not going to be happy about this one . . .

>
Source:
Documents raise skepticism on Hill about Bank of America
Tomoeh Murakami Tse
Washington Post October 21, 2009
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/20/AR2009102004159.html



http://globaleconomicanalysis.blogspot.com/2009/10/bernanke-guilty-of-coercion-and-market.html

"...Bank of America / Merrill Lynch Recap

•After closer review, Lewis, finally figured out merging with Merrill Lynch was not such a good idea. He threatened to back out of the deal.


•Paulson threatens to fire Lewis and the entire Bank of America board if they did not go through with the merger. This is coercion in my book.


•Lewis went ahead with a deal he knew was not in shareholder best interest. This is fraud against shareholders.


•Paulson called "Bank of America a Turd in the Punchbowl" while BAC Chief Financial Officer Joe Price sends an email to CEO Lewis saying “The chairman of the Federal Reserve indicated it would be structured in a manner such that BAC stock should go up when announced.”

If you are not outraged over this then something is wrong. I repeat what I said all the way back on April 24 "Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis."

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3. Kucinich Grills Ken Lewis on Fed Emails

June 2009
4:18 minutes
http://www.youtube.com/watch?v=Hro6tyGr5N0

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5. Bank of American Deal had Obama Team Approval before taking office

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=8707967&mesg_id=8707967

"Top economic advisers to President Obama signed off on a deal to protect Bank of America from losses incurred by its purchase of failed Wall Street firm Merrill Lynch a month before the new administration took office, according to Bank of America documents.

The documents, describing internal discussions at the bank in late 2008, assert that executives were told that incoming National Economic Council Director Lawrence H. Summers and incoming Treasury Secretary Timothy F. Geithner had endorsed the deal to provide new guarantees to Bank of America.

The acquisition has been a source of protracted debate since earlier this year, when questions arose about whether federal officials exerted an inappropriate amount of pressure on Bank of America to complete the deal. There's also been debate about whether the bank made appropriate disclosures to its shareholders about losses at Merrill Lynch, its negotiations with the government for additional support and compensation plans at Merrill Lynch.

...

The documents, which were obtained by The Washington Post and are in the hands of committee investigators, are the clearest sign that top Obama officials agreed with the Bush administration and the Federal Reserve's approach.

[Vidar]

6. Go Dennis!

[jtrockville]

7. Where can we see this? Webcast? C-Span?

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10. Staff member said it will be webcast on their site, postponed for now. n/t

[jtrockville]

11. Thanks

[rucky]

8. K&R

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9. POSTPONED - they are hoping to hold this hearing next week...

per a staffer at the committee.

http://oversight.house.gov/contact/

Thanks for the replies and recs.

[Kansas Wyatt]

12. I seen a Bank of America commercial a few weeks ago...

They were saying that they were helping Main Street during these hard economic times and helping Main Street to recover. Yada yada yada. Can't quote what exactly they were saying, because I was completely shocked they made a commercial to try to justify themselves.

I shit you not!

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13. They know most do not pay attention to what is happening...

with their tax dollars so they can pretty much say anything.