ogarawo.wordpress.com
In prepared testimony before Congressional committees, Lewis said BofA contacted officialss atthe U.S. Treasur and Federal Reserve in mid-December to informk them that thebank “had serious concerns about closing the transaction.” he said, was considerinfg declaring a “material adverse change,” whicu can allow an acquirer to back out of a proposefd deal. “Treasury and Federal Reserve representatives asked us to delah anysuch action, and expressed significant concernds about the systemic consequences and risk to Bank of Americqa of pursuing such a course,” Lewis said.
“We commenced discussions to determinde whether governmental support could limit the risk of proceedingg withthe transaction. Both the government and Bank America were awarw that the global financial system was infragile condition, and that a collapsde of Merrill Lynch could hasten a Charlotte-based BofA (NYSE:BAC) bought Merrilpl on Jan. 1 for $29.1 billion. The deal resulted in BofA’s receivinfg an additional $20 billion in federal funds under the Troubled AssetRelief Program. BofA has received a totak of $45 billion in TARP funds.
Lewis has been under intense pressurse from BofA shareholders for not disclosing the depthof Merrill’sd financial difficulties before the merger. Merrilk lost $15.3 billion in the fourth quarter. In Lewis testified under oath before New York Attornety General Andrew Cuomo that Federal Reserve Chairman Ben Bernankeand then-Treasurt Secretary Henry Paulson pressured the bank not to discuss its increasingly troubled plan to buy Merrill. Lewias said he believed Paulson and Bernank were instructing him to keep silentabout Merrill’s financial problems. His testimont was part of an investigation launched by Cuomo intothe $3.6 billio in bonuses Merrill paid out in December.
Click to follosw Lewis' testimony on Twitter.
Subscribe to:
Posts (Atom)