New York attorney general Andrew Cuomo wants regulators to take a look at the roles played by the Treasury and Federal Reserve in pushing the merger between Bank of America and Merrill Lynch last year, according to the Journal. Cuomo yesterday sent a series of documents to various Washington officials that detail the extensive interactions between federal officials and BofA CEO Ken Lewis in working towards the merger.
The documents include personal testimony from Lewis as well as minutes from BofA board meetings, which demonstrate that former Treasury secretary Henry Paulson and Fed chairman Ben Bernanke pushed the deal in spite of misgivings about Merrill’s 2008 losses. The acquired investment bank revealed $15.8 billion in Q4 losses only after the deal had been approved by shareholders at both companies.
According to Cuomo’s letter, both Paulson and Bernanke attempted to prevent public disclosure of the losses resulting from the acquisition. “I was instructed that ‘We do not want a public disclosure,’” testified Lewis. The decision to disclose “wasn’t up to me.”
“What we have uncovered about the Bank of America acquisition of Merrill raises fundamental questions about the interaction of regulators and those they regulate, as well as important issues of corporate responsibility and shareholder rights,” said Cuomo.